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<p>[QUOTE=&quot;fatima, post: 998770, member: 22143&quot;]Yes, and the government still follows this clause of the Constitution. It&#039;s still in the Constitution and thus new laws are subject to rulings by the Supreme Court based on this clause.&nbsp; &nbsp;&nbsp; While it is true the Congress can pass any law it wants, the law can also be declared unconstitutional by the supremes and that will be the end of that.&nbsp;&nbsp; </p><p><br /></p><p>What has to be understood, and most times isn&#039;t, is this clause in the Constitution is exactly why the Federal Reserve was created and eventually given monopoly over the the currency via the legal tender laws.&nbsp;&nbsp; The Federal Reserve, though created by Congress, is an private corporation with shares of stock owned by it&#039;s member banks.&nbsp; (these shares are not traded).&nbsp; &nbsp; In return for being granted its monopoly over the currency the President and Senate get to choose its head guy.&nbsp; </p><p><br /></p><p>So what does the Federal Reserve have to do with the Constitution?&nbsp; Since the Federal Reserve is a private company, the notes that it issues, i.e. The Federal Reserve Note otherwise known as the dollar, is a contract between the holder (you) and the Federal Reserve bank that issued it.&nbsp;&nbsp; It is not an obligation of the US government.&nbsp; Therefore, since the US government did not issue the FRN, it is not bound by the restrictions of the Constitution concerning gold and silver coins.&nbsp; &nbsp; In fact since it is a private contract, this leaves the Congress free to regulate it with any legislation including taxes and this is why, not co-incidentally, the IRS was formed when the Federal Reserve was formed.&nbsp; &nbsp; People, for the most part, accepted the creation of these two institutions at first because, 1. the federal reserve dollar was initially setup as an alternative to US currency, and 2. nobody paid income taxes at first.&nbsp; Now several generations later, the federal reserve dollar is the only dollar allowed and almost everyone is subject to reporting for income taxes. </p><p><br /></p><p>So what about coins and the OP&#039;s question.&nbsp;&nbsp; In the case of AGEs and ASEs, the issue has never been properly adjudicated in the courts.&nbsp; The coinage act of 1965 (also not adjudicated) does not apply because these coins were not mandated by congress until 1986.&nbsp;&nbsp; Initially it was Ron Paul that wanted the government to start issuing PM coins again as a way for people to get out of the Federal Reserve system.&nbsp; The AGE/ASE legislation was the only significant bill that he has gotten passed in the congress.&nbsp; A very enthusastic Reagan signed this into law as the idea suited his brand of conservatism.&nbsp;&nbsp; However Paul was not in office when the act was passed and one of the minions of the FR slipped in a provision that put legal tender status on the coins.&nbsp; When that happened, it put the coins in a nebulous legal state.&nbsp; &nbsp; That is, are the coins issued by the US Mint (hence US government) or by the Federal Reserve?&nbsp;&nbsp; (Regular coins these days are produced by the Mint, but they do not take on value until issued by a Federal Reserve bank)</p><p><br /></p><p>The distinction is very important in terms of the Constitution.&nbsp; If the coins are deemed to be issued by the Federal Government, then theoretically the government is constitutionally restricted to taxing transactions made with these coins to the face value of the coin or to it&#039;s official valuation of gold (currently $42/OZ).&nbsp; &nbsp; If it is deemed to be issued by the FR, then the value of the coin is it&#039;s intrinsic value in term of federal reserve notes and subjection to taxation at the much higher rate.&nbsp;&nbsp; It&#039;s a legal paradox that has yet to be decided though there is a case, if they decide to let the courts have it, that could decide the issue.&nbsp;&nbsp; </p><p><br /></p><p>In that case, there was a guy who owned a business, who paid his employees with AGEs.&nbsp;&nbsp; When reporting taxes they reported $50 income instead of the FRN value of the coin.&nbsp;&nbsp; His argument was that made above.&nbsp;&nbsp; This could not be allowed to stand, so the IRS, along with the full force of the government police force, raided his business, charged him will all kinds of tax fraud and initially tossed him in jail.&nbsp;&nbsp; I am not sure where it currently stands except to say that what should happen is for a competent lawyer to take the case and challenge the IRS&#039;s moves as being un-Constitutional. This part hasn&#039;t happened which brings in all the suspicions that I alluded to as they (the FR and goverment) don&#039;t want to go to the courts.[/QUOTE]</p><p><br /></p>

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