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Ron Paul's 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 tender statutes.

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that would halt any current prosecutions and void any convictions for violations of the current statutes that would be repealed.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 soar.

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 future.

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.

Maybe someday.

 



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