Utah Legislature sends strong gold standard message to Washington
If Utah's governor signs HB317, Utah will become the second state to recognize federally issued gold and silver coins as legal tender within the state.
Posted: Monday , 14 Mar 2011
RENO, NV -
A bill which requires Utah to recognize gold and silver as legal tender is now awaiting the signature of Republican Gov. Gary Herbert, who has yet to take a public stance on the issue.
However, HB317 does not compel a person to tender or accept gold and silver coin.
The measure also requires gold and silver coins to be valued at their current market value.
Larry Hilton, an attorney and insurance salesman who authored the Utah Sound Money Act, told the Salt Lake Tribune last December, "It's not intended to be compulsory in any way. The state is offering to taxpayers, ‘If you want to pay your taxes in gold or silver, we'll accept them.'"
Meanwhile, the bill also establishes a nonrefundable credit for any capital gains incurred "from the exchange of gold and silver coin issued by the federal government for another form of legal tender..." While gold and silver transactions would be exempted from the state's capital gains tax, they would still face federal taxes.
The legislation also required the Utah Legislature to study the "possibility of establishing an alternative form of legal tender" to come up with further recommendations for the 2012 session.
Legislative fiscal analysts have estimated the bill will reduce the state's income tax revenue by $260,000 in 2012 and $550,000 annually beginning in 2013.
Supporters of the measure hope Utah's legislation could spark a broader move by the U.S. Congress or states to readopt a gold standard, which was eliminated by President Richard Nixon in 1971.
"The passage of this bill today sends a strong message to Washington that money needs to have a defined value," said Jeffrey Bell, Policy Director for American Principles in Action. "Utah's decision to endorse gold and silver as legal tender addresses the dysfunctional monetary policy at the federal level and fulfills the authority given to states in the Constitution."
Senate Majority Leader Scott Jenkins, R-Plain City, said, "It will put some pressure on the federal government. That's the goal here because right now we have a dollar that's just running away with inflation and our hope is that this is a little bit of a shock that'll say we want to deal with inflation."
Utah is the first state to move toward recognizing gold and silver as money. Ten other states have proposed similar bills, but none have been voted out of committee. However, the bill's chief sponsor, State Rep. Brad Galvez, R-West Haven, said if the governor signs his legislation, Utah will be the second state to officially recognize gold and silver coins for tender. He told the Washington Times that Colorado has recognized gold and silver for decades.
"This is a great development for the cause of sound money, which makes sense for Utah, and all Americans for that matter," said Hilton. "It provides the means to opt out of the insidious ‘inflation tax' that has deprived so many of vast amounts of personal wealth."