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<p>[QUOTE=&quot;Moen1305, post: 1460801, member: 2544&quot;]NO TAX DOLLARS ARE USED IN THE MANUFACTURE OF COINS AND FEDERAL RESERVE NOTES IN THE UNITED STATES!</p><p>“Wait,” you might interrupt. “Aren’t these government agencies that are funded by congress?”</p><p>Yes, both the U.S. Mint and the Bureau of Engraving and Printing are bureaus under the Department of the Treasury whose budgets are approved by congress. However, the money that congress allocates to these bureaus are NOT taken from the general fund.</p><p>Both the U.S. Mint and the BEP are profit making bureaus. After manufacturing the money, it is sold at face value to the Federal Reserve for distribution to member banks and then to the public. The difference between the face value of the money and the cost to manufacture the money is the profit—called seigniorage. Even though the one cent and five cent coins cost more to manufacture than their face value, the U.S. Mint continues to generate profit from the sale of all coins sold to the Federal Reserve in addition to the sales of bullion and collectible coins.</p><p>According to the 2009 U.S. Mint Annual Report (covering Fiscal Year 2009: October 2008–September 2009), they earned $98.1 million in seigniorage. That is a profit of $98.1 million in a down economy!</p><p>When the U.S. Mint is paid by the Federal Reserve for the coins, a collector purchases collectibles directly from the U.S. Mint, or a bullion dealer buys bullion coins, the seigniorage is deposited into a special account called the United States Mint Public Enterprise Fund (PEF) as required by law (see 31 U.S.C. §5136). As sales are deposited in the PEF, the law requires that the U.S. Mint use the money in the PEF for budgetary reasons like to manufacture coins, maintain facilities, pay employees, etc. No tax money is deposited in the Public Enterprise Fund and the PEF is managed like all general accounts by the Treasury Department. In fact, excess profit is required to be deposited in the Treasury general fund.</p><p>There is a similar fund for the Bureau of Engraving and Printing (see 31 U.S.C. §5142).</p><p>If the money that the U.S. Mint uses for all its operations is withdrawn from the PEF and if the PEF does not contain any tax receipts, then how does it hurt taxpayers if the U.S. Mint continues to manufacture one and five cent coins?[/QUOTE]</p><p><br /></p>

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