Next Bill: No Chance
By Patrick A. Heller
On Dec. 9,
Rep. Ron Paul, R-Texas, addressed the U.S. House
of Representatives to announce the introduction
of a bill titled, the “Free Competition in
Currency Act of 2009.”
There are three main provisions of this bill.
First, it repeals Section 5103 of Title 31 of
the United States Code, which contains the legal
Second, it states that “no tax may be imposed on
(or with respect to the sale, exchange, or other
disposition of) any coin, medal, token, or gold,
silver, platinum, palladium, or rhodium bullion,
whether issued by a State, the United States, a
foreign government, or any other person.” This
provision would prohibit any income taxes on
bullion and monetary transactions.
Third, it states “no State may assess any tax or
fee on any currency, or any other monetary
instrument, which is used in the transaction of
interstate commerce or commerce with a foreign
country, and which is subject to the enjoyment
of legal tender status under article 1, section
10 of the United States Constitution.” This
provision means that sales taxes, property
taxes, and state income taxes would be
prohibited on bullion and monetary transactions.
Other provisions call for bringing other federal
statutes into conformity with the act. Also, it
includes a special rule that would halt any
current prosecutions and void any convictions
for violations of the current statutes that
would be repealed.
The proposed effective date for this bill is
Dec. 31, 2009.
The bill does not yet have a bill number. Rep.
Paul is currently seeking co-sponsors.
Should this bill become law, imagine what that
would do the prices of precious metals and rare
coins. By exempting those from income, sales and
property taxes, demand would almost certainly
Unfortunately, I think there is virtually no
chance that this legislation will come to pass
this year. It took more than 20 years for Ron
Paul’s “audit the Fed” legislation to make as
much progress as it has this year. Even though
it probably won’t happen this year, it may plant
the seeds for becoming law sometime in the
It so happens that I was in Washington on Dec. 9
for other purposes. Not long after Rep. Paul
introduced this bill, I bumped into him while we
were waiting to cross the street. He never
mentioned this bill during our brief
conversation, which I interpret to mean that he
does not consider this bill to be likely to pass
– at least not in 2009.