AZ: Gold and silver can be legal tender

[AZRedhawk44]

http://www.mineweb.com/mineweb/content/en/mineweb-political-economy?oid=182807&sn=Detail

A bill being proposed could make gold and silver legal tender for paying off debts to the State.

I liked, until I read this:

The measure also states that any coin or bullion that has gold or silver content and is issued by the United States Government can be defined as legal tender. However, no one can be compelled to accept coin or bullion containing gold or silver. The measure would also mandate that coin or bullion containing gold or silver issued by the U.S. Government cannot be taxed as property since it is to be considered money.

Meaning that coin or bullion containing gold or silver NOT issued by the US Government CAN be taxed as property since it is NOT considered money?

I distrust this dichotomy between US-printed and non-US-printed coin and bullion.  Most of my silver is from reputable non-US mints.  About a buck an ounce cheaper.

(And good luck taxing any of my gold or silver... like I'd disclose the amount I might or might not have to a tax assessor. )

[charby]

Meaning that coin or bullion containing gold or silver NOT issued by the US Government CAN be taxed as property since it is NOT considered money?

Trying to cover the capital gains taxes on investments. Make sense to me.

[AZRedhawk44]

Trying to cover the capital gains taxes on investments. Make sense to me.

But we already have exemptions in our State for sales tax transactions pertaining to any numismatic precious metal transaction. 

And sales of PM's are currently not considered "income" due to the concept that PM's don't really appreciate in value, they just hold value against inflation.

It's the beginning of a sneaky change in lawmaker outlook, I think.

[Brad Johnson]

http://www.mineweb.com/mineweb/content/en/mineweb-political-economy?oid=182807&sn=Detail

Meaning that coin or bullion containing gold or silver NOT issued by the US Government CAN be taxed as property since it is NOT considered money?

Uh, yeah, because it, um, is.

Brad

[charby]

And sales of PM's are currently not considered "income" due to the concept that PM's don't really appreciate in value, they just hold value against inflation.

I'm going to take that as your opinion since I have read otherwise.

http://www.tradersgame.com/articles/taxing-gold.html

[zahc]

I'm confused as to the usage of "legal tender" in this context. A silver quarter from pre-what, 73?...is solid silver and worth like $12. So, does this law say that your creditor has to except spot price for your US-minted gold or silver, or just its face value?

I'm confused if this means that my creditor has to accept my silver quarter, or if it means he has to accept it at spot value. And how would that be legally enforced?

[RoadKingLarry]

Silver coins are pre '65. After that they're clad/sandwich. Pennies went to played zinc in '83 or '84.

There had been a few businesses around here offering huge "discounts" if you use silver coins for your purchase. Haven't seen it in a while though. 

[De Selby]

I guess they don't believe in the constitution down there 

[Blakenzy]

But money is taxed... inflation?

[MicroBalrog]

I guess they don't believe in the constitution down there 

Section. 10.No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

It's clear that the states are not prohibited from making gold and silver legal tender.

[De Selby]

Micro, sorry, there's not even a close argument on this one:

To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures

...is the relevant part.  Currency is the federal government's enumerated territory.  Interfering with itby designating competing currencies to be tender is contrary to the word of it and all judicial interpretations of intent from the founding period onward.

The framers intended for the Feds to have a monopoly on monetary policy.

[MicroBalrog]

Are you implying that if the Federal government is given a power by Section 8, then the states are precluded from acting in that field, even if they're not expressly prohibited from it?

[Blakenzy]

The problem is that the Feds have relinquished monetary authority to "THE FED". They are in dereliction of duty.

 

[De Selby]

Are you implying that if the Federal government is given a power by Section 8, then the states are precluded from acting in that field, even if they're not expressly prohibited from it?

There wasn't any implication at all - I think I was quite direct in explaining that the federal government's authority in this area cannot be interfered with, which designating alternate currencies does and is indeed designed to do.  Having a federal monetary system at all occupied the field.

The argument for concurrent exercise of powers doesn't wash with money, never will and never has.  It's also not within the design of the constitution.

[Tallpine]

So how come the feds never cracked down on corporations issuing "company scrip" 

Instead, the feds machine-gunned miners who dare to strike.

As I recall from history, there's been lots of other currencies in use, especially during the frontier expansion.

[De Selby]

So how come the feds never cracked down on corporations issuing "company scrip" 

Instead, the feds machine-gunned miners who dare to strike.

As I recall from history, there's been lots of other currencies in use, especially during the frontier expansion.

Trade goods and vouchers aren't the same thing as coined money, gold or otherwise.

[birdman]

Trade goods and vouchers aren't the same thing as coined money, gold or otherwise.

Isn't this not a constitutional issue, but rather a legislation issue?  Before the federal reserve act, plenty of states and private banks had their own currency--gold/silver certificates. Even now, exchangeable monetary instruments (bitcoin, bearer bonds, etc) are also used.
The issue becomes when the instrument in question has "US" and/or some denomination reflecting an official federal currency (dollars, cents).
A state or private entity could issue a silver/gold coin denominated in ounce Troy, or bitcoin, or whatever, and it would count as a trade good, voucher, or financial instrument, not "money".  To that end, any instrument convertible to/from US dollars would also function in this regard and be legal, provided any requisite taxes due were paid (in dollars). 

As with past court cases, the illegality comes into play when the instrument explicitly (or even implicitly) reflects a fixed and demandable exchange with the US federal reserve note, US minted coins, or "dollars".

Not only that, there is a big difference between coinage and reserve notes.  Only the US mint can issue metallic coinage denominated in dollars.  However, as a collectible or bullion item, anyone can issue a "coin" provided it doesn't say dollars, cents, or other controlled term....as evidenced by innumerable billion rounds.

The above squares with all the current case law, and your own stae,nets about trade goods and vouchers, as well as current activities.

The issue becomes when they no longer accept the US currency, or have legislation reflecting an explicit substitution.

[RoadKingLarry]

So how come the feds never cracked down on corporations issuing "company scrip" 

Instead, the feds machine-gunned miners who dare to strike.

As I recall from history, there's been lots of other currencies in use, especially during the frontier expansion.

They were just filthy union scum that deserved it.

[De Selby]

Birdman, you're absolutely right in saying that simply allowing use of bitcoin, monoply money, or anything else for trade is a matter of federal policy and not constitutionally prohibited. 

Making something legal tender, however, means that you can force someone (in this case the state gov) to accept it as payment, and on that point the constitution's grant of power is specific.  That's the difference between gold being just something you can trade, and a state-recognised currency that contradicts the constitution's grant of power to the federal government.  Giving that quality to gold makes for printing money that competes with the fed's dollar.

To get around it you'd need something like an explicit federal statute recognising gold and silver as currency again, or at least allowing it to be recognised in certain states.

[birdman]

Birdman, you're absolutely right in saying that simply allowing use of bitcoin, monoply money, or anything else for trade is a matter of federal policy and not constitutionally prohibited. 

Making something legal tender, however, means that you can force someone (in this case the state gov) to accept it as payment, and on that point the constitution's grant of power is specific.  That's the difference between gold being just something you can trade, and a state-recognised currency that contradicts the constitution's grant of power to the federal government.  Giving that quality to gold makes for printing money that competes with the fed's dollar.

To get around it you'd need something like an explicit federal statute recognising gold and silver as currency again, or at least allowing it to be recognised in certain states.

The constitution's grant of power is INTERSTATE, and only coinage.  The federal reserve act (which unified paper money) and the various legislative acts that broke the money/gold link are not part of the constitution.

Regardless, the federal government can force a state to have to accept the US dollar for intrastate transactions, however, there isn't anything in those acts, or in the constitution that prevents a state from accepting other forms of payment IN ADDITION to dollars, for intra-state transactions.   The reserve act and the others were done under the commerce clause, and as such, have limited preemption power over intrastate...provided any federal taxes are paid with dollars. 

So again, as long as its not dollars, or at a fixed exchange rate w.r.t. Dollars (and thus de facto dollars) its a trade good, and not Money. 

So, I think that while the fed can say you HAVE to accept dollars, I think the ability of a state to force its residents to accept BOTH a federal and state currency (for purely intrastate transactions) is murky legally. 

However, a state making a state currency that is official (state debts / taxes can be paid with it) but voluntary (a merchant can choose to accept it for intrastate) is totally legal, which I believe is what they are doing. 

Given Gresham's law, I wouldn't be surprised if the voluntary trade "currency" became more used than the fiat for intrastate.

[De Selby]

There's no law needed to authorise people to accept gold - you only need a law if you want to force someone to accept it as payment, which this law would do.

The constitution's grant of power over the value of money and coinage has nothing to do with relations between the states or the interstate commerce clause.  It's much broader and more explicit in what it grants to the federal government, which is a monopoly on monetary policy.

This sort of scheme has been tested before, and never wins.  That's because it's one of the design elements of the constitution, as opposed to many of the "interstate commerce" regulations dreamed up by the Feds.  A lot of the crap built under the commerce clause is indeed very murky, which is why the fed gov loses those cases on occasion.  They never lose when it comes to defining legal tender.

[Tallpine]

There's no law needed to authorise people to accept gold - you only need a law if you want to force someone to accept it as payment, which this law would do.

...

A bill being proposed could make gold and silver legal tender for paying off debts to the State.

 

[De Selby]

Yeah, that's the part of the article I was going off - to make something legal tender is to make it mandatory to accept it.  So if the law is passed and you want to pay your Colorado taxes in gold, the state can't require dollars instead.  That's the feature of the scheme that makes it unconstitutional.

[dogmush]

Yeah, that's the part of the article I was going off - to make something legal tender is to make it mandatory to accept it.  So if the law is passed and you want to pay your Colorado taxes in gold, the state can't require dollars instead.  That's the feature of the scheme that makes it unconstitutional.

But it's a State law. If they want to require dollars they just repeal the law?

[De Selby]

But it's a State law. If they want to require dollars they just repeal the law?

Or not pass it, but yeah.  Absent a law, a state/person/company can accept whatever it wants as payment of a debt owed. 

The point of making something legal tender is to ensure that payment can't be refused in preference for some other item/currency.