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The Murphy Court: Human Life has No Value









By Idaho State Rep., Phil Hart
April 4, 2012

Last week the House State Affairs Committee of the Idaho Legislature sent to the amending order a Sound Money bill. This bill is called the “Idaho Constitutional Money Act of 2012." The purpose of the bill is to remove barriers and provide statutory authority for those in Idaho who may choose to do business with gold and silver coin. The bill will declare gold and silver coins currently minted by the United States Mint as legal tender in Idaho.

The authority to conduct business in gold and silver coin already exists at the federal level in the United States Code. You can find the statute at 31U.S.C. 5118 (d)(2). What I am sure some will find surprising is that our states are required to do business in gold and silver coin as mandated by the United States Constitution.

“No state shall…. Make anything but gold and silver coin a tender in payment of debts:….” United States Constitution, article I, section 10, clause 1.

If we were obeying the Constitution, all state business would be conducted in gold and silver coin. But most of us have forgotten our Constitution, and very few of us push back enough to slow the process down of America’s transformation from limited government to big government. Reliance on fiat money is necessary to support big government.

Today’s out of control creation of fiat money by the private Federal Reserve Bank is evidence that the “chains of the Constitution” that Thomas Jefferson referred to as what would hold back government have been completely broken. And the growth of our government along with its deficit spending now threatens the very survival of our Nation.

But these chains do not need to stay broken forever. They can be repaired. The Constitution is only ink on paper. It has no life of its own. It gets its life from us. Our ignorance of the Constitution effectively makes it a dead document. And our ignorance provides energy and encouragement to those who choose to abuse the Constitution, and consequently abuse us. This dynamic is accurately portrayed in the movie The Matrix. Our choice to remain both ignorant and silent empowers those who have abused the process. And from a practical standpoint we have been enslaved with unpayable debts and stifling taxation. Thomas Jefferson also said “Those who expect to be ignorant and free, expect something that never was and never will be.”

On the contrary, when we are knowledgeable of our Constitution, we are less likely to stand on the sidelines and watch the Constitution be abused. When we withhold our consent to unconstitutional government actions, by way of our resistance, the usurpers are instead thwarted.

Only by defending the Constitution will we be able to restore our Republic. And the defense of the Constutition needs to start at the grassroots; because the further one climbs in the political hierarchy, the more likely they are to abuse the Constitution. Even the courts put their wetted finger up to check which way the political wind is blowing.

Since the first TARP (Troubled Asset Relief Program) bailout at the end of the Bush Administration, the Federal Reserve Bank is thought to have created $29 trillion. We actually can only estimate the amount because today the Fed seeks to hide what they are doing. This is enough money to buy over half of all the assets in the United States and will prove to be highly inflationary. And since the United States Dollar functions as the reserve currency of the world, when the rapid decline in the value of the dollar begins, it will likely be catastrophic. Hence, the necessity of this legislation.

The French hyper-inflation of the 1790’s was similar to the German hyper-inflation of the 1930’s in that both inflations were contained within a single country. And in both cases when the currency collapse was complete, these countries had stable neighbors to help them recover. Our future hyper-inflation will be more like Rome’s where the currency of an empire was debased taking down with it the economies of the known world. In our case, the collapse of the U.S. Dollar is going to have worldwide implications.

Idaho can build a lifeboat to mitigate what is now unavoidable: future hyper-inflation. We can do this by encouraging the use of stable money in our economy. House Bill 578 seeks to do this by removing barriers to the use of gold and silver coin, and ensuring that our courts are empowered to enforce any gold and silver contracts that find their way into the courtroom.

House Bill 578 also removes the state of Idaho capital gains tax on United States minted legal tender gold and silver coins. Such a tax is effectively a tax on the possession of money itself. To my knowledge, we have never levied a direct tax on money in the history of the United States. But through our abandonment of gold and silver as money, and our use of inflationary fiat money that is created out of thin air, we have indirectly taxed the existence of constitutional money in the form of gold and silver coin by way of the capital gains tax. From a practical standpoint this constitutes a quiet confiscation of wealth, and from a legal standpoint I believe it is an unconstitutional direct tax.

As a culture we have left the use of gold and silver as a medium of exchange far back in our past. Now only a minority of people understand the importance of a stable medium of exchange. House Bill 578 seeks to reacquaint Idahoans with constitutional money. It also facilitates the use of constitutional money by adding affirmative language for the use of gold and silver coin to our state statutes. From 1933 to 1977 these gold contracts will illegal.

Contributing to the drafting of HB578 was Dr. Edwin Vieira. Dr. Vieira is considered America’s premier authority on the use and history of constitutional legal tender and is the holder of four degrees from Harvard University including a PhD in Chemistry and a PhD from the Harvard Law School. Dr. Vieira also authored Pieces of Eight and Crashmaker, two major works on monetary policy.

There has been some criticism of HB578. The allegation is that the bill will provide a way to avoid taxes. The Idaho Code already exempts the purchase of gold and silver bullion and coins from sales tax (I.C. 63-3622V). The additional tax exemption provided by HB578 is very narrow and only affects the exchange of United States minted legal tender gold and silver coins from capital gains tax when exchanged for U.S. paper currency.

If one were to go to the bank and present a $100 bill and ask for $20’s in exchange, no one would object if they were handed five $20’s. But if you were to only receive four $20’s back, everyone would have a problem with that. Well, this is what we are doing today with legal tender gold and silver coins. We are taxing their existence by way of a capital gains tax when the coins are exchanged for paper currency. Was there really a gain? Or did the paper money decrease in value with the value of the gold and silver coins remaining stable? If the latter is true, than a capital gains tax on the gold and silver is really not a tax, but rather a theft of one’s wealth by way of inflation.

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If HB578 becomes law, when using legal tender gold and silver coins to make a purchase one will still have to pay sales tax on that purchase. The only new tax exemption provided by HB578 is the very narrow one which only affects the exchange of United States minted legal tender gold and silver coins for legal tender paper currency.

The next step for HB578 will be an attempt to amend the bill to correct a few technical issues. This will be done on the floor of the House of Representatives with all seventy members weighing in. If amended, HB578 will next be heard by the entire House again as an amended bill. If the House passes it, the bill goes over to the Senate for a public hearing in committee and then consideration on the Senate floor.

2016 Phil Hart - All Rights Reserved

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Phil received a bachelor's degree in Civil Engineering from the University of Utah and a master's degree in Business Administration from the Wharton School at the University of Pennsylvania.

In 2004, Phil Hart was elected by the Citizens of North Idaho to represent District 3 in the Idaho Legislature. District 3 encompasses the northern part of Kootenai County. Phil Hart is actively seeking re-election for the 2008 legislative term.

Phil has dedicated a significant amount of personal time for the past ten years in trying to resolve the constitutionality Income Tax. His efforts have resulted in the publication of his book Constitutional Income, which is in its third edition. His book has been steadily covering ground across the United States. He also litigated the issue with the IRS and petitioned the Supreme Court.




The authority to conduct business in gold and silver coin already exists at the federal level in the United States Code. You can find the statute at 31U.S.C. 5118 (d)(2).