Wednesday, March 30, 2011

Can't Win 'Em All, Even Though Won In One

Given the decades-long headwinds that the gold standard has faced, it was a real breakthough to see the Utahan legislature approve of gold-standard legislation and Utah's Governor sign the bill into law. Once the law is enacted, the state capital gains tax on the metals will be eliminated. Utahans will be able to buy and sell using U.S.-minted gold coins voluntarily. A committee will be set up that will determine how they can pay state taxes in gold and silver, and look at other means by which the metals can be used as money. The bill explicitly recognizes gold and silver Eagles as legal tender in the state.

In so doing, the Utahan goverment has rolled back an "advance" that has been in place since 1933. Believe it or not, it was illegal for U.S. citizens to buy and keep gold until 1975.

An important precedent at the state level has been set, but that doesn't mean other states are going to be following anytime soon. In Montana, House bill 513, which would have established a state reserve in gold and silver using the tobacco tax revenue stream and required dealing in gold and silver with some contractors and/or taxpayers, was defeated in a close vote of 52 to 48. Democrats, and many Republicans, voted against the measure. Amendments to include coal and copper were soundly defeated.

A shame, but Rome was not rebuilt in a day. The fact that the Montana house was close to approving it shows that state restoration of the gold standard is an idea whose time has come. The article indicates the kind of scare-talk that such initiatives call up: one Democrat intimated that the gold-standard bill was part of a secret plot pushing Montana to secession.

[Interesting role reversal, that. How does it feel to be on the inside of a purported conspiracy?]