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One thing I've observed many times over the years is that the government likes to have its cake and eat it too. For instance, they ruled that gold coins were l

by MCRed 11y ago

One thing I've observed many times over the years is that the government likes to have its cake and eat it too. For instance, they ruled that gold coins were legal tender. Then one bright employer started paying his employees in gold coins from the US Mint. If I give you 12 $50 gold coins that are legal tender, I've paid you $600 dollars, right? Say your salary is one of those a month. What should you claim as your income on your taxes? $600? That's well below the $4k and you don't even have to file. https://en.wikipedia.org/wiki/American_Gold_Eagle https://en.wikipedia.org/wiki/American_Gold_Eagle But the IRS decided that it didn't matter that they were $50 legal tender, and took him to court where the court rules that the "value" of them was what mattered. So here they are literally claiming it is one way when it's convenient to them and another when that is more convenient. The laws are written, always, to give maximum power and flexibility to the government and little to none to you. Expecting consistency out of them would be a mistake.

A_COMPUTER 11y ago
It's difficult to use that particular example, because in reality he was still paying them with cash, but just the cash value of the gold coins, rather than the gold coins themselves. I'm not disagreeing with you that the government wants to have its cake and eat it too, but so did that guy. Maybe the case wouldn't have been so clear-cut if he'd actually paid them in gold coins.
wmf 11y ago
Various problems emerge when you dig deeper into this idea. Is the employer paying less than minimum wage? Presumably the employer buys each coin for >$1,000 and thus takes a massive loss by "selling" it to an employee for $50; is that an accounting problem? Presumably the employee takes their "$50" salary and sells it for >$1,000; is that not a taxable gain for the employee?
colechristensen 11y ago
Clearly, someone who is trying to pay their employees with gold coins is trying to evade taxes. Of the many grey-legal ways to avoid taxes, this one particularly shouldn't make a person indignant. Find other places to complain about the lack of empowerment of ordinary citizens which are a tad bit more reasonable.
s73v3r 11y ago
Except you would be an idiot who is clearly trying to get around the rules, and would be rightfully shut down.
- Dylan16807 11y ago
  In that case, sure. In a lot of cases it's really unclear what intent of the law would be, or the intent is contradictory.
NeutronBoy 11y ago
> One thing I've observed many times over the years is that the government likes to have its cake and eat it too Just like the Bitcoin community, who to this day insist that Bitcoin is a legitimate alternative to 'cash money', then crow that they aren't subject to any of the existing laws governing 'cash money'?
- etherael 11y ago
  Just like the atheists, who to this day insist the lack of adherence to a religion is a legitimate alternative to spiritual guidance from the church, then crow that they're not subject to canon law?
- jasonisalive 11y ago
  Hello, I'm a Bitcoin community member, I can help clear this one up for you: 1) Bitcoin is claimed as a legitimate alternative to cash money insofar as: Bitcoin proponents believe that, if the world valued Bitcoin, it would function superbly as a money. So "legitimacy" here means "workable" or "beneficial" - it has nothing to do with legitimation by governments. 2) Many Bitcoin proponents are of the opinion that governments destroy wealth and hamper economic progress by trying to restrict and control the actions of people, in so doing preventing more organic and consensus-based mechanisms of social organisation emerging. Thus the argument that Bitcoin should not be subjected to existing cash laws is a) an attempt to prevent Bitcoin from early smothering by suspicious governmental authorities and b) an early-game strategy, the end game of which would be the significant or total disempowerment and/or disestablishment of government.
anigbrowl 11y ago
Even you don't buy this argument. Suppose you have one of these coins. I offer you a $50 bill and aa $5 bill in exchange because I like shiny metal things. You refuse, even though I am nominally offering you a profit of $5, because you're not an idiot and like me, you value the coin for its gold content rather than its facial value. 'Legal tender' does not mean 'sole determinant of value,' only that you as a creditor can't reject it if it is tendered to satisfy a debt. If you legally owe me $1 million and offer to settle the debt with a giant diamond, I might take your offer but I'm not obliged to. But if you offer me $1 million in $100 bills I have to take it - I can't reject it on the grounds of inconvenience or anything else. But suppose you owe me $50. Can I require you to pay me with one of the $50 gold coins? No, I have to take a $50 bill if that's what you choose to offer. OF course, you're referring to the case where Robert Kayre wwent ot prison for 15 years for tax evasion involving gold coins. http://cdn.ca9.uscourts.gov/datastore/opinions/2013/12/23/09-10471%20web%20revised.pdf http://cdn.ca9.uscourts.gov/datastore/opinions/2013/12/23/09... What actually happened was his workers would go to a warehouse, where they would receive gold coins (or certificates of ownership of same), which they would then immediately 'sell' - at the same location - for envelopes full of cash. Kahre's wife produced payroll sheets based on the cash amounts. However, employees were never issued W-2 or 1099 forms, for either the cash amounts or the gold coin amounts. Notably, any employees who opted to retain coins rather than sell them had the fair market value of the coin deducted from the 'amount owed' in their payroll records. Generally they didn't, so Kahre and his wife would keep recirculating the same gold coins over and over - withdrawing a bunch of cash from the bank, 'paying' an employee with coins and then 'buying' them back immediately with the cash, 'paying' the next employee with the coins they had just 'bought' and so on. Kahre was doing this not only for his own business (a drywall/construction services company) but for a bunch of other businesses in his local area, for which he raked off $14 million in fees, but didn't see fit to file any tax returns documenting this fact. All told, the total amount of unpaid taxes in the case amounted to about $57 million. This wasn't bright,it was fraudulent. there was plenty of notice that where the market value of an asset exceeded the face value (as of these coins) that the asset was taxable as property at the market value, going to back to well before the coins in question were issued. Kahre's legal arguments depended heavily on the fact that the matter hadn't been litigated in court before, even though similar matters had and even though there were clear rules promulgated by the IRS. On top of that, the actual mechanics of the payment operation made it screamingly obvious that the payments in gold were nothing more than a sham, using workers' brief physical contact with the gold coins as justification for not filing taxes while operating a parallel system of buying and selling the same coins over and over as an excuse for getting regular old cash from the employer to the workers. If you actually think schemes of this kind make sense then you are a gullible person and I strongly recommend you avoid investing on the basis of these beliefs.
ars 11y ago
I'm not following your argument. You have to pay taxes on gifts too, or barter. The gold coins are legal tender, and you have to pay tax on the value of the gift (the gold in that coin) you get.
jasonisalive 11y ago
It's almost as if the government as a social institution continuously and inexorably acts to expand and reinforce its power over society, regardless of any constitutional or rational or utilitarian grounds for its expansion... as if the people in government seek to reinforce and expand the job security and fiscal prospects of being an agent of government, regardless of whether their actions are welcomed by or beneficial to the people they are ostensibly meant to serve, or actually just ever more patronising and controlling overreach... /s
Lawtonfogle 11y ago
My favorite case of this: We are going to charge you as an adult for producing child porn by taking a picture of yourself while you were a child.

by MCRed 11y ago

A_COMPUTER 11y ago

It's difficult to use that particular example, because in reality he was still paying them with cash, but just the cash value of the gold coins, rather than the gold coins themselves. I'm not disagreeing with you that the government wants to have its cake and eat it too, but so did that guy. Maybe the case wouldn't have been so clear-cut if he'd actually paid them in gold coins.

wmf 11y ago

Various problems emerge when you dig deeper into this idea. Is the employer paying less than minimum wage? Presumably the employer buys each coin for >$1,000 and thus takes a massive loss by "selling" it to an employee for $50; is that an accounting problem? Presumably the employee takes their "$50" salary and sells it for >$1,000; is that not a taxable gain for the employee?

colechristensen 11y ago

Clearly, someone who is trying to pay their employees with gold coins is trying to evade taxes. Of the many grey-legal ways to avoid taxes, this one particularly shouldn't make a person indignant. Find other places to complain about the lack of empowerment of ordinary citizens which are a tad bit more reasonable.

s73v3r 11y ago

Except you would be an idiot who is clearly trying to get around the rules, and would be rightfully shut down.

Dylan16807 11y ago
In that case, sure. In a lot of cases it's really unclear what intent of the law would be, or the intent is contradictory.

NeutronBoy 11y ago

> One thing I've observed many times over the years is that the government likes to have its cake and eat it too Just like the Bitcoin community, who to this day insist that Bitcoin is a legitimate alternative to 'cash money', then crow that they aren't subject to any of the existing laws governing 'cash money'?

etherael 11y ago
Just like the atheists, who to this day insist the lack of adherence to a religion is a legitimate alternative to spiritual guidance from the church, then crow that they're not subject to canon law?
jasonisalive 11y ago
Hello, I'm a Bitcoin community member, I can help clear this one up for you: 1) Bitcoin is claimed as a legitimate alternative to cash money insofar as: Bitcoin proponents believe that, if the world valued Bitcoin, it would function superbly as a money. So "legitimacy" here means "workable" or "beneficial" - it has nothing to do with legitimation by governments. 2) Many Bitcoin proponents are of the opinion that governments destroy wealth and hamper economic progress by trying to restrict and control the actions of people, in so doing preventing more organic and consensus-based mechanisms of social organisation emerging. Thus the argument that Bitcoin should not be subjected to existing cash laws is a) an attempt to prevent Bitcoin from early smothering by suspicious governmental authorities and b) an early-game strategy, the end game of which would be the significant or total disempowerment and/or disestablishment of government.

anigbrowl 11y ago

Even you don't buy this argument. Suppose you have one of these coins. I offer you a $50 bill and aa $5 bill in exchange because I like shiny metal things. You refuse, even though I am nominally offering you a profit of $5, because you're not an idiot and like me, you value the coin for its gold content rather than its facial value. 'Legal tender' does not mean 'sole determinant of value,' only that you as a creditor can't reject it if it is tendered to satisfy a debt. If you legally owe me $1 million and offer to settle the debt with a giant diamond, I might take your offer but I'm not obliged to. But if you offer me $1 million in $100 bills I have to take it - I can't reject it on the grounds of inconvenience or anything else. But suppose you owe me $50. Can I require you to pay me with one of the $50 gold coins? No, I have to take a $50 bill if that's what you choose to offer. OF course, you're referring to the case where Robert Kayre wwent ot prison for 15 years for tax evasion involving gold coins. http://cdn.ca9.uscourts.gov/datastore/opinions/2013/12/23/09-10471%20web%20revised.pdf http://cdn.ca9.uscourts.gov/datastore/opinions/2013/12/23/09... What actually happened was his workers would go to a warehouse, where they would receive gold coins (or certificates of ownership of same), which they would then immediately 'sell' - at the same location - for envelopes full of cash. Kahre's wife produced payroll sheets based on the cash amounts. However, employees were never issued W-2 or 1099 forms, for either the cash amounts or the gold coin amounts. Notably, any employees who opted to retain coins rather than sell them had the fair market value of the coin deducted from the 'amount owed' in their payroll records. Generally they didn't, so Kahre and his wife would keep recirculating the same gold coins over and over - withdrawing a bunch of cash from the bank, 'paying' an employee with coins and then 'buying' them back immediately with the cash, 'paying' the next employee with the coins they had just 'bought' and so on. Kahre was doing this not only for his own business (a drywall/construction services company) but for a bunch of other businesses in his local area, for which he raked off $14 million in fees, but didn't see fit to file any tax returns documenting this fact. All told, the total amount of unpaid taxes in the case amounted to about $57 million. This wasn't bright,it was fraudulent. there was plenty of notice that where the market value of an asset exceeded the face value (as of these coins) that the asset was taxable as property at the market value, going to back to well before the coins in question were issued. Kahre's legal arguments depended heavily on the fact that the matter hadn't been litigated in court before, even though similar matters had and even though there were clear rules promulgated by the IRS. On top of that, the actual mechanics of the payment operation made it screamingly obvious that the payments in gold were nothing more than a sham, using workers' brief physical contact with the gold coins as justification for not filing taxes while operating a parallel system of buying and selling the same coins over and over as an excuse for getting regular old cash from the employer to the workers. If you actually think schemes of this kind make sense then you are a gullible person and I strongly recommend you avoid investing on the basis of these beliefs.

ars 11y ago

I'm not following your argument. You have to pay taxes on gifts too, or barter. The gold coins are legal tender, and you have to pay tax on the value of the gift (the gold in that coin) you get.

jasonisalive 11y ago

It's almost as if the government as a social institution continuously and inexorably acts to expand and reinforce its power over society, regardless of any constitutional or rational or utilitarian grounds for its expansion... as if the people in government seek to reinforce and expand the job security and fiscal prospects of being an agent of government, regardless of whether their actions are welcomed by or beneficial to the people they are ostensibly meant to serve, or actually just ever more patronising and controlling overreach... /s

Lawtonfogle 11y ago

My favorite case of this: We are going to charge you as an adult for producing child porn by taking a picture of yourself while you were a child.