Georgia considers a bill to use gold to pay state taxes

[galtgulch]

<<<"Friday, March 6, 2009

Georgians could pay future state taxes in gold

Atlanta Business Chronicle - by Joe Rauch Staff writer

If a bill under review by the Georgia House becomes law, state residents might be paying 2010 taxes in gold.

Now assigned to the House of Representatives’ Banks & Banking committee, HB 430, or the Constitutional Tender Act, would require the use of gold and silver coin for the repayment of debts to the state, notably all state taxes. It would also mandate that any bank conducting business with the state accept gold and silver coins as deposits.

In effect, the bill seeks to revive the gold and silver standards for certain forms of state business, and Georgia would become the only state in the country to do so.

Reps. Bobby Franklin, R-Marietta, and Barry Loudermilk, R-Cassville, are sponsoring the bill.

Under the current version of the bill, the state would accept checks or other payments linked to gold coin- or silver coin-backed accounts, and could accept Federal Reserve dollars — the existing U.S. standard for nearly four decades — for other types of transactions.

“[Gold and silver] coins shall be the exclusive medium which the state shall accept from any person or entity as payment of any obligation to the state including, without limitation, the payment of taxes; provided, however, that other forms of currency may be used in all other transactions within the state upon mutual consent of the part of any such transaction,” the bill states.

The law would take effect on Jan. 1, 2010, and would affect billions in annual transactions with the state.

So far in fiscal year 2009, Georgia’s Department of Revenue has collected $9.9 billion in various taxes. The state’s fiscal year ends on June 30.

The bill, filed on Feb. 17, is unlikely to become law, observers said.

“We’re monitoring the legislation and do not see much appetite from the General Assembly for Georgia to be the only state in the Union to adopt such a standard,” said David Oliver, spokesman for the Georgia Bankers Association, in a prepared statement.

“I have a lot of sympathy for the gold standard and the role it played in our country’s history,” said George Selgin. Selgin is the BB&T Corp. chair of free-market thought at West Virginia University.

Selgin is an expert on the history of currency standards and monetary theory.

“But after reading over it, I have to think this bill is a bit kooky,” he said.

The bill harkens back to a now century-old debate in the United States — tying the nation’s currency to value of precious metals like gold or silver — that has recently renewed amid the ongoing economic crisis.

The U.S. used competing forms of the gold and silver standards in the 19th century, but silver’s use faded in the 20th century, leaving only gold.

The fight over such standards peaked in the United States during the late 19th and early 20th century, when politician William Jennings Bryan famously argued against the standard in 1896, stating: “You shall not crucify mankind upon a cross of gold.”

Currently, the value of U.S. dollars is not backed by any commodity, and has no intrinsic value, also known as fiat money.

The national gold standard ended in 1971, when President Richard Nixon announced the government would no longer redeem U.S. dollars with an equivalent amount of gold.

The U.S. money supply now grows and shrinks according to supply and demand, rather than the value of gold, a key cog in the bill’s outline for gold- and silver-backed payment accounts.

“Federal Reserve Accounting Unit Dollars, having no redeeming value in gold or silver coin, shall not be made a tender in payment of debts by the state,” it states.

Reader Comments

(1) Comments

William Greene March 12, 2009 11:36PM EST

Looks like some folks need to read the bill more carefully. For example, there isn't any real mention of the fact that the U.S. Constitution REQUIRES every single state to ONLY use gold and silver for ALL transactions, according to Article 1, Section 10.

Also, current U.S. dollars (Federal Reserve Notes) would NOT be accepted by the State for a limited set of unspecified transactions involving "mutual consent of the parties." That section is referring to what everyone ELSE in the State is allowed to do -- they can use gold, silver, or even worthless pieces of paper with pictures of dead politicians on them. It's their choice under this bill.

If you really want to get the full amount of information on this bill, go to this website: http://www.ConstitutionalTender.com/

See especially the FAQ section. It explains a LOT.

">>>

[Brant Gaede]

Sorry, Federal legal tender laws means this won't survive any Federal Court review.

--Brant

[Chris Grieb]

Brant anticipated my response. We have to get rid of legal tender laws.

[galtgulch]

Brant anticipated my response. We have to get rid of legal tender laws.

Et al,

I agree. Then we must plead for our Congressmen to repeal the Federal Legal Tender laws to which you refer.

Then we keep track of who supports it and who does not and use that in our campaigns to take their seats!

This will be a mission of the campaign for liberty I guarantee.

Aren't you glad the www.campaignforliberty.com exists?

17 Mar 6:30 AM 118169 and counting.

Join and help.

gulch

[tjohnson]

The U.S. money supply now grows and shrinks according to supply and demand

Too bad this wasn't true. It would be interesting to see what would happen if the Fed did try and do this instead of fixing interest rates. In other words, allow the interest rates to be set by the market place but monitor the money supply in a way that ties it to economic activity. I think this would help prevent the abuse we have seen.

[BaalChatzaf]

Sorry, Federal legal tender laws means this won't survive any Federal Court review.

--Brant

That is right. According to the law federal notes or checks written on federal notes must be accepted for all debts, public or private. The state cannot compel payment in gold or checks drawn on a gold account, nor can the states force anyone to accept such checks.

Ba'al Chatzaf

[syrakusos]

That is right. According to the law federal notes or checks written on federal notes must be accepted for all debts, public or private. The state cannot compel payment in gold or checks drawn on a gold account, nor can the states force anyone to accept such checks.

Wrong

Wrong

Wrong

"I thought that United States currency was legal tender for all debts. Some businesses or governmental agencies say that they will only accept checks, money orders or credit cards as payment, and others will only accept currency notes in denominations of $20 or smaller. Isn't this illegal?"

The pertinent portion of law that applies to your question is the Coinage Act of 1965, specifically Section 31 U.S.C. 5103, entitled "Legal tender," which states: "United States coins and currency (including Federal reserve notes and circulating notes of Federal reserve banks and national banks) are legal tender for all debts, public charges, taxes, and dues."

This statute means that all United States money as identified above are a valid and legal offer of payment for debts when tendered to a creditor. There is, however, no Federal statute mandating that a private business, a person or an organization must accept currency or coins as for payment for goods and/or services. Private businesses are free to develop their own policies on whether or not to accept cash unless there is a State law which says otherwise. For example, a bus line may prohibit payment of fares in pennies or dollar bills. In addition, movie theaters, convenience stores and gas stations may refuse to accept large denomination currency (usually notes above $20) as a matter of policy.

http://www.ustreas.gov/education/faq/curre...al-tender.shtml

Article 1 Section 10 of the U.S. Constitution reads:

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 anything 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 means that a state, if it issues its own money, must issue only gold or silver coin with which to pay its own debts. This put an end to State paper money (and minor coins). Remember that one of the arguments against the Federal Constitution was that the Federal government would assume the State debts from the War. Anti-federalists objected because the power of the purse put too much into the hands of the federal government ... which then sold bonds to pay off the state debts, of course...

Finally, thar's gold in them thar hills! -- Georgia has naturally occuring gold, which is why they had a Federal Branch Mint -- but I'm that sure all of you already knew that.

Edited March 18, 2009 by Michael E. Marotta

[galtgulch]

Article 1 Section 10 of the U.S. Constitution reads:

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 anything 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 means that a state, if it issues its own money, must issue only gold or silver coin with which to pay its own debts. This put an end to State paper money (and minor coins). Remember that one of the arguments against the Federal Constitution was that the Federal government would assume the State debts from the War. Anti-federalists objected because the power of the purse put too much into the hands of the federal government ... which then sold bonds to pay off the state debts, of course...

Finally, thar's gold in them thar hills! -- Georgia has naturally occurring gold, which is why they had a Federal Branch Mint -- but I'm that sure all of you already knew that.

I learned from a recent article in Freedom Daily the publication of the Future of Freedom Foundation that the impetus for the creation of a federal govt after the surrender at Yorktown was that many debtors in the new states wanted the states to allow them to repay their loans with paper currency rather than gold and silver (which they had borrowed from their creditors) The creditors agitated for the creation of the Federal Government and the provisions in the Constitution to make nothing other than gold and silver coin legal tender and forbid expost facto laws which changed the content of the original contracts the debtors had signed. Or was it the Bills of Attainder also forbidden.

Bet you didn't know that?

www.campaignforliberty.com 17Mar 10:30PM 119958. 10:38 119999

gulch

Edited March 18, 2009 by galtgulch

[John Tate]

Article 1 Section 10 of the U.S. Constitution reads:

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 anything 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 means that a state, if it issues its own money, must issue only gold or silver coin with which to pay its own debts. This put an end to State paper money (and minor coins). Remember that one of the arguments against the Federal Constitution was that the Federal government would assume the State debts from the War. Anti-federalists objected because the power of the purse put too much into the hands of the federal government ... which then sold bonds to pay off the state debts, of course...

Finally, thar's gold in them thar hills! -- Georgia has naturally occurring gold, which is why they had a Federal Branch Mint -- but I'm that sure all of you already knew that.

I learned from a recent article in Freedom Daily the publication of the Future of Freedom Foundation that the impetus for the creation of a federal govt after the surrender at Yorktown was that many debtors in the new states wanted the states to allow them to repay their loans with paper currency rather than gold and silver (which they had borrowed from their creditors) The creditors agitated for the creation of the Federal Government and the provisions in the Constitution to make nothing other than gold and silver coin legal tender and forbid expost facto laws which changed the content of the original contracts the debtors had signed. Or was it the Bills of Attainder also forbidden.

Bet you didn't know that?

www.campaignforliberty.com 17Mar 10:30PM 119958. 10:38 119999

gulch

I suddenly feel a bit better about having the largely shittier aussie constitution that makes it extremely hard for the Government to change existing contracts. Pity the queen can land whenever she wants a veto anything the Government does.

[SherryTX]

Article 1 Section 10 of the U.S. Constitution reads:

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 anything 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 means that a state, if it issues its own money, must issue only gold or silver coin with which to pay its own debts. This put an end to State paper money (and minor coins). Remember that one of the arguments against the Federal Constitution was that the Federal government would assume the State debts from the War. Anti-federalists objected because the power of the purse put too much into the hands of the federal government ... which then sold bonds to pay off the state debts, of course...

Finally, thar's gold in them thar hills! -- Georgia has naturally occurring gold, which is why they had a Federal Branch Mint -- but I'm that sure all of you already knew that.

I learned from a recent article in Freedom Daily the publication of the Future of Freedom Foundation that the impetus for the creation of a federal govt after the surrender at Yorktown was that many debtors in the new states wanted the states to allow them to repay their loans with paper currency rather than gold and silver (which they had borrowed from their creditors) The creditors agitated for the creation of the Federal Government and the provisions in the Constitution to make nothing other than gold and silver coin legal tender and forbid expost facto laws which changed the content of the original contracts the debtors had signed. Or was it the Bills of Attainder also forbidden.

Bet you didn't know that?

www.campaignforliberty.com 17Mar 10:30PM 119958. 10:38 119999

gulch

I suddenly feel a bit better about having the largely shittier aussie constitution that makes it extremely hard for the Government to change existing contracts. Pity the queen can land whenever she wants a veto anything the Government does.

Didn't they do away with states printing their own money after the Civil War?

I don't see how any person or entity could be forced to pay with other means besides "legal tender". I don't think it would stand up in court either. Though, I can understand any state wanting to go this way - I think the reality of the situation is that most of the taxes wouldn't get paid. Right now gold is hard to come by. And very very expensive right now.

[BaalChatzaf]

Brant anticipated my response. We have to get rid of legal tender laws.

Et al,

I agree. Then we must plead for our Congressmen to repeal the Federal Legal Tender laws to which you refer.

Then we keep track of who supports it and who does not and use that in our campaigns to take their seats!

This will be a mission of the campaign for liberty I guarantee.

Aren't you glad the www.campaignforliberty.com exists?

17 Mar 6:30 AM 118169 and counting.

Join and help.

gulch

Delenda Cartago est!

Ba'al Chatzaf

[syrakusos]

I learned from a recent article in Freedom Daily the publication of the Future of Freedom Foundation that the impetus for the creation of a federal govt after the surrender at Yorktown was that many debtors in the new states wanted the states to allow them to repay their loans with paper currency rather than gold and silver (which they had borrowed from their creditors) The creditors agitated for the creation of the Federal Government and the provisions in the Constitution to make nothing other than gold and silver coin legal tender ... gulch

I liked the sound of that better than my post -- and I mean that literally: language is real. So, I went to The Federalist Papers and found this in Number 44 by Madison. The salient point is that the states were forbidden to coin money. Under the Artlcles, it was a shared power. Under the Constitution only Congress has the right to coin money. So, Art. 1. Sec. 10 could not have the meaning I gave it.

Now, whether the federal govenment can make anything but gold and silver legal tender is another issue entirely.

On "Bill of Attainder" and "ex post facto law" you need to follow up for your own benefit.

Mike M.

Michael E. Marotta

"Full faith and credit"

[Alfonso Jones]

I learned from a recent article in Freedom Daily the publication of the Future of Freedom Foundation that the impetus for the creation of a federal govt after the surrender at Yorktown was that many debtors in the new states wanted the states to allow them to repay their loans with paper currency rather than gold and silver (which they had borrowed from their creditors) The creditors agitated for the creation of the Federal Government and the provisions in the Constitution to make nothing other than gold and silver coin legal tender and forbid expost facto laws which changed the content of the original contracts the debtors had signed. Or was it the Bills of Attainder also forbidden.

Bet you didn't know that?

www.campaignforliberty.com 17Mar 10:30PM 119958. 10:38 119999

gulch

gulch -

Can you provide us with some more detail - perhaps some references / links on this?

Bill P