No Help for Gold Standard
February 10, 2012
There are sound economic reasons to advocate the adoption of a gold or precious metal monetary standard for the United States.
However, the case is gravely weakened if it gets mixed up with tax fraud.
I read a story yesterday on boston.com http://articles.boston.com/2012-02-09/news/31042755_1_silver-coins-paper-dollars-silver-dollars about someone who has petitioned Andover, Mass., to consider a proposal at a town meeting in April that would involve paying its employees partly in silver American Eagles if the employees agree.
So, far no problem.
However, the rest of the proposal is that the town would have to withhold income taxes only on the $1 face value of the coins, not the $35 actual value.
The article goes on to point out that the Internal Revenue Service takes a dim view of such a proposal and has won cases in court to enforce the current tax law.
While advocates of a gold standard cannot control the actions of everybody else, it does not help the case to see it mixed up with mischief in this way.
With advocacy of something new, like a gold standard, which almost no one now living remembers, the burden of proof weighs more heavily on its supporters rather than on upholders of the status quo to explain its advantages thoroughly and make it clear that this is not some trickster’s dream system to take advantage of the majority of people who are not familiar with how the standard worked before it was abandoned in 1933.
Even during the gold standard era, people had to pay income tax after it was adopted.
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