Utah's Gold Reform, The Return Of A Gold Standard?

Online, April 6, 2011 (Newswire.com) - The state senate has passed a law in Utah that eradicates state taxes on the exchange of gold and silver coins. Gold and silver coins are now considered legal tender in the same manner as fiat currency. The legislature is additionally considering an alternative form of currency to be used within state borders, though critics are doubtful this will be achieved due to constitutional issues.

The tax code treats gold and silver coins as currency and not an asset which means no capital gains or state taxes will be applied though federal taxes will continue to be upheld. The reduction of tax on gold and silver could lead to banks forming accounts specifically designed for gold and silver coins. The bill is considered to be a positive move amongst the general public.

Larry Hilton, who headed the reform, doesn't foresee $50 gold coins being used in shops and restaurants in the same manner as fiat currency, especially when you consider their market value is well over a $1,000. Residents of Utah will be allowed to mint gold and silver coins and will benefit from alternative tax breaks although using these high value coins in shopping malls and petrol stations is not advised.

The bill, sponsored by Brad Galvez, is said to be an attack against the U.S. government. It is intended to give people an alternative for financial transaction in the wake of reckless government policy. There have been growing concerns over devaluating the national currency which has created public unrest. Gold is seen as a hedge against this and against rising inflation. Another advantage to gold tender is that it cannot be printed and manipulated by the government in the same way as fiat currency. This is considered an important issue amongst the general public in the current economic climate.

Other states are reportedly considering a similar tactic against Ben Bernanke, Federal Chairman in order to draw attention to the instability of the dollar. Virginia is proposing a law that will prevent high inflation by allowing gold, silver and platinum coins to be minted. They additionally tried to create their own currency but the bill was not passed. Twelve other states are allegedly considering similar options which may serve to persuade U.S. Congress to take on a gold standard.