Pay your taxes in gold and silver?

There are some bizarre pieces of legislation that turn around and affect the coin collecting hobby. Lately, there’s been a lot of buzz about how the HCR bill will affect sales of bullion, but a Georgia state representative is really trying to throw a wrench into the works with the “Constitutional Tender Act”.

Gold and silver coins from a shipwreck

Gold and silver coins from a shipwreck, from Flickr

Georgia’s House Bill 430 is seeking to require gold and silver coinage for payment of all state tax bills. The bill’s author, Rep. Bobby Franklin, cites Article 1, Section 10 of the US Constitution as his justification. A review of the Article seems to vaguely support his claim. It reads:

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 seems like Rep. Franklin is reading the law very narrowly. As I read it, the article forbids states from tendering (ie; paying) debts in non-precious metals. The manner in which the state collects taxes is a separate matter. Granted, I don’t see that any state would want to collect Federal Reserve notes in taxes and then pay debts in gold and silver coins at face value. Does the Constitution really require states to pay their debts in precious metals? What do you think?

Daily Kos hits it pretty much right on:

One response to “Pay your taxes in gold and silver?

  1. Virginia is going down the same road – House Joint Resolution No. 557 is a precursor to the state minting its own gold and silver.

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