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View Full Version : How is Utah's gold/silver competing currency system working out?




RileyE104
10-13-2011, 08:36 PM
Just wondering.. It's been awhile since I heard anything about it. Last I heard is when they legalized the use of gold and silver.

Keith and stuff
10-13-2011, 08:42 PM
There is no such thing in UT. You are allowed to pay the state government in Gold at face value of the coin (for for example, a coin worth $1,600 may have $100 printed on it. You can pay your state government debt at the face value. As far as I know, not a single person has done that. Since you lose $1,600 per coin, it makes sense that no one would do it. Anyway.

RileyE104
10-13-2011, 08:44 PM
There is no such thing in UT. You are allowed to pay the state government in Gold at face value of the coin (for for example, a coin worth $1,600 may have $100 printed on it. You can pay your state government debt at the face value. As far as I know, not a single person has done that. Since you lose $1,600 per coin, it makes sense that no one would do it. Anyway.

hmmm, i thought i had read that people there would be allowed to use gold or silver as long as the other party agreed to the transaction..

Keith and stuff
10-13-2011, 08:57 PM
I have no idea what you are talking about. References please. Remember, it was about gold at face value. So instead of the actual market price of $1,600 or $1,700 per ounce it is $100 or so per ounce. Face value of the coin.

emazur
10-13-2011, 09:38 PM
He's talking about this:
http://www.thenewamerican.com/index.php/economy/markets-mainmenu-45/6894-gold-silver-now-legal-tender-in-utah
I don't live in Utah so I don't know how it is, but it wouldn't make sense for them to pass a law saying you can use a $100 gold coin as legal tender when it ALREADY is legal tender officially valued at $100 that you could use in any state.

RileyE104
10-13-2011, 09:44 PM
He's talking about this:
http://www.thenewamerican.com/index.php/economy/markets-mainmenu-45/6894-gold-silver-now-legal-tender-in-utah
I don't live in Utah so I don't know how it is, but it wouldn't make sense for them to pass a law saying you can use a $100 gold coin as legal tender when it ALREADY is legal tender officially valued at $100 that you could use in any state.

^ that is what I was talking about, and I was under the impression that it would be considered legal tender at market value as opposed to face?

hazek
10-13-2011, 09:47 PM
Bill text:
http://le.utah.gov/~2011/bills/hbillenr/hb0317.htm

If you check how the bill was originally composed and then edited it at least to me indicates that they were very careful not to legislate coins at face value but rather their market value of an government minted coins: http://le.utah.gov/~2011/bills/hbillint/HB0317S01_ComparedWith_HB0317.pdf

The Goat
10-13-2011, 09:49 PM
you can pay someone a $100 coin let them pay taxes on $100 but they get a $100 coin worth $1700. at least I'm pretty sure it will work like htis

Keith and stuff
10-13-2011, 09:50 PM
^ that is what I was talking about, and I was under the impression that it would be considered legal tender at market value as opposed to face?

OK. I just read the bill http://le.utah.gov/~2011/bills/hbillint/hb0317s01.htm

So it isn't really either face or market though face is likely implied since the bill only deals with federal coins which have a face value. Because the bill includes "does not compel a person to tender or accept gold and silver coin" it means that the whole face vs market value argument isn't of much point as there is never a case where that decision will need to be made in UT.

If I read that correctly, all the bill does is remove the previous capital gains tax and sales tax in UT on the sale of federal gold or silver coins. So that brings UT in line with NH for example. Additionally, the bill creates this, " 61 59-1-1504. Revenue and Taxation Interim Committee study.
62 The Revenue and Taxation Interim Committee shall during the 2011 interim:
63 (1) study the possibility of establishing an alternative form of legal tender for the
64 payment of debts, public charges, taxes, and dues within the state;
65 (2) recommend whether legislation should be drafted to establish an alternative form of
66 legal tender; and
67 (3) prepare any legislation that the Revenue and Taxation Interim Committee
68 recommends in accordance with Subsection (2) for consideration by the Legislature during the
69 2012 General Session."

While the bill is a step forward because it brings UT's backwards tax code slightly more in line with liberty and calls for a committee to be created, it doesn't nothing else that is enforceable.

Keith and stuff
10-13-2011, 09:51 PM
you can pay someone a $100 coin let them pay taxes on $100 but they get a $100 coin worth $1700. at least I'm pretty sure it will work like htis

Federally, if there is profit made, a person has to pay taxes on the coin if it is gold or silver at which ever value the IRS determines. So for a silver dollar the IRS would likely say it is only worth face value, unless someone did this a lot. For federal gold coins, the IRS would likely argue that it was worth market value. It all depends on the IRS.

hazek
10-13-2011, 09:51 PM
It is face for government folks, sorry to disappoint :(

How do you know? The bill text doesn't seem to imply that.

EDIT:
it didn't change anything.

It didn't because there are still federal capital gains taxes that still apply.

Keith and stuff
10-13-2011, 09:55 PM
How do you know? The bill text doesn't seem to imply that.


What on Earth are you talking about? I didn't make this up. Expert after expert said it. My guess is that almost every liberty lover knows this.

hazek
10-13-2011, 09:58 PM
What on Earth are you talking about? I didn't make this up. Expert after expert said it. My guess is that almost every liberty lover knows this. I guess the extremely ignorant types may not but...

Read the bill, read the bill before it was substituted and tell me where you get that coins are to be taken at face value.

Becker
10-14-2011, 12:19 AM
hmmm, i thought i had read that people there would be allowed to use gold or silver as long as the other party agreed to the transaction..

that was never illegal.

Becker
10-14-2011, 12:20 AM
Read the bill, read the bill before it was substituted and tell me where you get that coins are to be taken at face value.

which is exactly what makes the bill nonsense, and why nobody has "taken advantage" of it.

Becker
10-14-2011, 12:21 AM
^ that is what I was talking about, and I was under the impression that it would be considered legal tender at market value as opposed to face?

nothing can be "legal tender" at a non-fixed value. that's what legal tender means, an agreed in advance value which one is FORCED TO ACCEPT.

Jandrsn21
10-14-2011, 12:59 AM
What on Earth are you talking about? I didn't make this up. Expert after expert said it. My guess is that almost every liberty lover knows this. I guess the extremely ignorant types may not but...

Why would they make it face value! What is all the hype over buying a gold coin for $1600 and using it for only 100$. Maybe to the Federal Government, but I heard an interview the other day that you could deposit gold and silver in a bank account and use it at spot value to buy things in Utah. With PMs being so volatile doing this would be VERY beneficial to some, but beware the IRS!

http://www.youtube.com/watch?v=G7Kra0Mjqj8&feature=player_embedded This is the interview I saw the other day, very informative!

nobody's_hero
10-14-2011, 02:32 AM
Maybe they intended for people to adjust prices accordingly? Say, you could fill up a tank of gas for $54 in FRN or $3 in gold (1700/100 = $17 FRNs per $1 gold). Of course, the state would have to adjust taxes accordingly as well.

This sounds confusing.

tasteless
10-14-2011, 03:27 AM
you can pay someone a $100 coin let them pay taxes on $100 but they get a $100 coin worth $1700. at least I'm pretty sure it will work like htis

lol wow, doesn't this create a huge loophole with taxes?

Let's say a car's real value is $25500. If someone was to pay in gold coins, it could be sold for $1500 as long as it was bought with 15 $100 and save a lot of money from going to the taxman.

[edit]

Or maybe someone could demand payment in gold coins, get paid 60 $100 gold coins in one year. They'd be receiving $102,000 worth of gold but "really" only be making $6000. You'd be getting six figures and still be eligible for welfare lol.

Arklatex
10-14-2011, 07:28 AM
tasteless there was a case I believe it was last year or year before where that's what an employer was doing to skip on payroll taxes, he was paying in silver eagles. Well they got him finally with the minimum wage laws.

What you implying I think it possible, anything is possible really since the people hold the power it's just how much they can brainwash us into believing we owe them money.

Keith and stuff
10-14-2011, 08:11 AM
lol wow, doesn't this create a huge loophole with taxes?

Let's say a car's real value is $25500. If someone was to pay in gold coins, it could be sold for $1500 as long as it was bought with 15 $100 and save a lot of money from going to the taxman.


It is the worst of both worlds. The coins are valued at only spot but if you don't pay the federal government taxes at actual value, the IRS or some other department will come after you. I don't know how UT deals with it with local taxes but since I doubt anyone is using the law because coins are at spot it may not matter.

hazek
10-14-2011, 09:53 AM
It is the worst of both worlds. The coins are valued at only spot but if you don't pay the federal government taxes at actual value, the IRS or some other department will come after you. I don't know how UT deals with it with local taxes but since I doubt anyone is using the law because coins are at spot it may not matter.

I wished you didn't appear as if you're talking out of your arse and cited a few sources for your statements. Do you have any proof that what you're saying is actually true?

fisharmor
10-14-2011, 10:00 AM
lol wow, doesn't this create a huge loophole with taxes?

Let's say a car's real value is $25500. If someone was to pay in gold coins, it could be sold for $1500 as long as it was bought with 15 $100 and save a lot of money from going to the taxman.

[edit]

Or maybe someone could demand payment in gold coins, get paid 60 $100 gold coins in one year. They'd be receiving $102,000 worth of gold but "really" only be making $6000. You'd be getting six figures and still be eligible for welfare lol.

The name you want to remember is Robert Kahre.
He is currently serving a 15 year prison sentence for doing exactly this.

http://www.lasvegassun.com/news/2009/nov/17/businessman-robert-kahre-sentenced-tax-fraud-schem/

Zippyjuan
10-14-2011, 11:05 AM
As I am reading through the bill, I don't see anyplace where it indicates that gold or silver coins shall or can be exchanged at the value of their metal content. What it does say is:

(1) Gold and silver coin issued by the federal government is legal tender in the state.

Legal tender typically refers to face value. Legal tender value of Federal Reserve notes are the face value, not the underlying value of the linen it is printed on. The bill does say that if you do make a purchase with gold or silver coins that that transaction is exempt from sales taxes.

The summary:

Highlighted Provisions:
20 This bill:
21 < provides definitions;
22 < recognizes gold and silver coins issued by the federal government to be legal tender
23 in the state;
24 < does not compel a person to tender or accept gold and silver coin;
25 < provides that the exchange of gold and silver coins for another form of legal tender
26 does not create any individual income or sales tax liability;
27 < requires the Revenue and Taxation Interim Committee to:
28 C study the possibility of establishing an alternative form of legal tender;
29 C recommend whether an alternative form of legal tender should be established;
30 and
31 C prepare any recommended legislation for the 2012 General Session; and
32 < enacts an uncodified severability clause.

http://le.utah.gov/~2011/bills/hbillenr/hb0317.pdf

hazek
10-14-2011, 11:24 AM
Zippyjuan did you read the original bill and how they changed it?

Why would they edit it in this way if not for the purpose of not legislating the coins value?

General Description:
This bill recognizes gold and silver coins that are issued {and deemed legal tender }by
the federal government as legal tender in the state and exempts the exchange of the
coins from certain types of state tax liability.
Highlighted Provisions:
This bill:
< provides definitions;
< recognizes gold and silver coins issued {and deemed legal tender }by the federal
government to be legal tender in the state;

http://le.utah.gov/~2011/bills/hbillint/HB0317S01_ComparedWith_HB0317.pdf

Krugerrand
10-14-2011, 11:28 AM
The name you want to remember is Robert Kahre.
He is currently serving a 15 year prison sentence for doing exactly this.

http://www.lasvegassun.com/news/2009/nov/17/businessman-robert-kahre-sentenced-tax-fraud-schem/



That's guy's story is so sad. He flat out asked the IRS about it and they couldn't give hims a straight answer. He paid is bills to them in US Eagles and they took them at face value.

Zippyjuan
10-14-2011, 11:46 AM
Zippyjuan did you read the original bill and how they changed it?

Why would they edit it in this way if not for the purpose of not legislating the coins value?


http://le.utah.gov/~2011/bills/hbillint/HB0317S01_ComparedWith_HB0317.pdf

I don't see how what I said is changed. Perhaps you can explain. It recongizes coins issued by the US Government to be legal tender in the state. As I mentioned, legal tender usually refers to being accepted at face value. What the changed language does allow would be say commerative coins which have a value printed on them but are not considered to be "legal tender" according to the US government. Again, we are looking at the face value, not the metal content, as determining the value of the coin as a medium for exchange.

If there is a section which does indicate that coins can be traded for goods and services at their metal content, I would definately like to look at it. Perhaps somebody can find it (the bill is quite short).

hazek
10-14-2011, 12:08 PM
I know it's short. I'm not making any statements either. I'm simply confused and am trying to figure this out.

But the difference at least to me is that in the revised and adopted text it simply says coins issued by government are legal tender in the state which I understand as the value of the coins being what the market pays for them. But in the original text I understand it as coins already being deemed legal tender, then I'd say their value is their face value and not weight market value..

I don't know, can't one of you Americans calls someone in Utah and figure this out? :)

Keith and stuff
10-14-2011, 12:35 PM
I wished you didn't appear as if you're talking out of your arse and cited a few sources for your statements. Do you have any proof that what you're saying is actually true?

I am sorry but this issue was already settled.
http://www.rapidtrends.com/robert-kahre-vs-the-irs-and-doj/

The new law in UT does nothing to counteract the IRS opinion on the issue. I didn't feel I needed to site this story because I thought it was so well known. I am sorry. I'll try to site things more in the future.

The whole point of this thread is silly because there is no competing gold/silver currency system in UT. People were originally confused about what the bill is about and told folks wrong information. The bill was over hyped by some liberty folks.

There actually are competing gold/silver currency systems in NH. Of course, the government doesn't sanction them. It is mostly present during Porcfest but exists to some extent for the rest of the year. Have you heard about this? The NPR podcast Planet Money went to Porcfest and did a 25 minute story on this.
http://www.npr.org/blogs/money/2011/06/29/137478762/the-tuesday-podcast-libertarian-summer-camp


On today's Planet Money, we travel to a place where people are trying to live without government interference. A place where you can use bits of silver to buy uninspected bacon.

It's the 2011 Porcupine Freedom Festival, known to its friends as PorcFest. It's the summer festival for people who think we should return to the gold standard and abolish the IRS.

We wondered how you make that work in real life. How do you, say, buy breakfast without involving the government? It's not easy.

Becker
10-14-2011, 12:43 PM
The name you want to remember is Robert Kahre.
He is currently serving a 15 year prison sentence for doing exactly this.

http://www.lasvegassun.com/news/2009/nov/17/businessman-robert-kahre-sentenced-tax-fraud-schem/



also, Tom Cryer