Thursday, March 24, 2011
Utah House stamps gold, silver as legal tender
By Lee Davidson
The Salt Lake Tribune
First published Mar 04 2011 12:14PM
Updated Mar 22, 2011 11:52PM
It may not fold as conveniently as dollar bills, but the Utah House took a first step Friday to recognize gold and silver as legal tender.
It voted 47-26 to pass HB317 by Rep. Brad Galvez, R-West Haven, and sent it to the Senate. The measure would recognize as legal tender gold and silver coins issued by the federal government — not just their face value, but also their value in gold and silver or to a collector.
It also would order the state to study whether Utah should establish an alternative form of legal tender, such as one backed by silver and gold.
“This is a step in preparedness, a step in security,” Galvez said, “that allows us to be able to help hold up our economy as the dollar continues to shrink.”
Rep. Ken Ivory, R-West Jordan, said, for example, that a 1960s John F. Kennedy half-dollar coin — 90 percent silver — would have bought three gallons of gasoline with its face value in the mid-60s. But the value of the silver in it today would buy about five gallons of gas, while the face value of the coin would buy only a fraction of a gallon.
Ivory said the bill is “a way for us to preserve for the citizens of Utah … the purchasing power of the money they hold.”
The bill would not require anyone to accept gold and silver coins as legal tender. It also would exempt the sale of such U.S. coins from state sales taxes and from capital-gains taxes.
Rep. Steve Eliason, R-Sandy, a certified public accountant, opposed the bill, saying it could create tax loopholes. He said people seeking to escape capital-gains taxes on other assets — such as gold bullion — might be able to do so by selling it for coins under the bill.