Wednesday, July 21, 2010

FDR's Ghost, Taxing Gold Again

I believe the story here is not precisely one of a *new tax* but rather one that simply closes an existing loophole. Allow me to explain.

I know someone who recently sold some precious metals they had been hoarding since the apocalyptic 70s. I believe they received a check for the proceeds AND assurance that the there would be no reporting of the transaction to the IRS. Imagine the ordeal of having to dig up your cost basis on gold or silver bought 30-40 years ago!  And then the ordeal of paying capital gains!

With gold the arch-enemy of a fiat-printing, self-enthroned Big long did you expect this info-loophole to last?

I'd say to still buy the precious metals. After all, you're probably never going to want to convert it back to dollars. It'll be toted to and for exchange in another less-bankrupt country. Or it'll be used to buy food and ammo!

BTW, this is hardly the first attack by slimy pols on a competitive currency.

Back in the Depression, FDR demanded that IRS agents be present at the opening of any safety deposit boxes or something:
"I, as President, do declare that the national emergency still exists; that the continued private hoarding of gold and silver by subjects of the United States poses a grave threat to the peace, equal justice and well-being of the United States; and that appropriate measures must be taken immediately to protect the interests of our people."

"Therefore, pursuant to the above authority, I hereby proclaim that such gold and silver holdings are prohibited, and that all such coin, bullion or other possession of gold and silver be tendered within fourteen (14) days to agents of the Government of the United States for compensation at the official price, in the legal tender of the Government. All safe-deposit boxes in banks or financial institutions have been sealed pending action in the due course of law." 
Furthermore, since FDR fathered Big Government, we can still sort of blame him the rank thuggery of slipping gold regulation into *healthcare legislation* today.

See also - Book Rec - The Forgotten Man by Amity Shlaes.


Taylor Conant said...


I assume you mean he fathered it in the US. But many libertarians say that Lincoln was the actual progenitor of Big Govt in the US.

Justin Time said...

Nobody says that, Conant.

Anonymous said...

You need to do more research. There was no "loophole" allowing you to skip taxes on gains made from the sale of collectible investments.

The change in 1099 issuance is intended to deter tax fraud.