Congressman Ron Paul [R-TX] on Wednesday introduced legislation that would, if signed into law, end taxes on coins and bullion and repeal legal tender laws. The bill’s lofty goal is to reintroduce a system of competing currencies.
"At this country’s founding, there was no government controlled national currency. While the Constitution established the Congressional power of minting coins, it was not until 1792 that the US Mint was formally established," Rep. Ron Paul said.
"In the meantime, Americans made do with foreign silver and gold coins. Even after the Mint’s operations got underway, foreign coins continued to circulate within the United States, and did so for several decades.
H.R. 4248, or the Free Competition in Currency Act of 2009, includes several measures to end government controlled currency. One is to repeal Section 5103 of Title 31 of the United States Code which includes legal tender language that, according to Ron Paul, should not exist.
"There is nothing in the Constitution that grants the Congress the power to enact legal tender laws. We, the Congress, have the power to coin money, regulate the value thereof, and of foreign coin, but not to declare a legal tender. Yet, there is a section of US Code, 31 USC 5103, that purports to establish US coins and currency, including Federal Reserve notes, as legal tender."
Federal law currently mandates short-term capital gains rates of up to 35 percent for coins and long-term capital gains taxes of 28 percent, which Ron Paul argues is a hindrance to competitive currencies. H.R. 4248 would eliminate taxes on "any coin, medal, token, or gold, silver, platinum, palladium, or rhodium bullion" as well as restrict states from assessing taxes and fees "on any currency."
Finally, the legislation would eliminate laws that prohibit the operation of private mints, and retroactively end prosecutions and convictions of citizens who have been charged with such. Ron Paul specifically discussed this aspect of the bill as well as the raids on Liberty Dollar when he introduced the legislation. (See Liberty, Ron Paul Dollars Seized in Raid.)
"Evidently the government felt threatened, as Liberty Dollars had all their precious metal coins seized by the FBI and Secret Service in November of 2007. Of course, not all of these coins were owned by Liberty Services, as many were held in trust as backing for silver and gold certificates which Liberty Services issued. None of this matters, of course, to the government, which hates competition. The responsibility to protect contracts is of no interest to the government."
The bill has been referred to the Committee on Financial Services, and in addition to the Committees on Ways and Means, and the Judiciary.
For any legislation to become law, it must pass in the House, Senate and get signed by the President.
The act of creating money is that which most singularly defines the sovereign power of any state. In a perfect world- one which was ruled by wise men, who desire both peace and justice– National Currencies would be circulated alongside private ones, as it was in this nation prior to the Federal Reserve Act of 1913. Unfortunately, we do not currently live in such a world. While I praise Ron Paul’s efforts, I am skeptical that such a bill will ever make it past the President’s desk. The problem is that Today, U.S. Dollar has been rendered worthless due to… Read more »
I don’t think it’s a good idea to introduce competing currencies to the United States. For someone who claims to be a constitutionalist, Paul’s proposal goes against one of the signature achievements of the Constitution: the elimination of the many currencies floating around the states under the Articles of Confederation.
Paul’s ideas about money are just out of date and have no place in a modern economy where the economy goes through booms and busts and a central bank and federal government need to use fiscal and monetary policy to compensate.
Oliver
Booms and busts did not necessitate a central bank, they are results of it. Milton Friedman and others proved this decades ago. When there were competing, legal currencies, debasing one form or brand of “money” (whether by adding base metal to coins or by printing unbacked paper currency) could not cause a general boom or bust; it simply meant people spent the bad “money” like hot potatoes (for as long as they could get anyone else to take it) while hoarding the better forms of money. This held true even under the Constitution before 1913, because ordinary banks could and… Read more »
Ron Paul understands, more than anybody, how this economy works. As Congressman he regularly bumps heads with the “Fed” head chairperson and makes him eat his words. America needs Mr. Paul to begin applying and leading this nation towards an economy of health by promoting; strong dollar (by gold/silver backing) true free market free of Federal interference (state regulated) Strong National Defense personal freedoms that are protected and more Constitutionally, legislatively, and morally, Ron Paul has no equal. His 22 year voting record speaks for itself. The World is watching. Ron Paul for President in 2012. Thank You ttp://www.issues2000.org/tx/Ron_Paul.htm The… Read more »