FFF.org | From what I can tell, the feds are going after Kahre for two main reasons, both of which appear to me to be ludicrous abuses of prosecutorial power. First, the feds are upset that Kahre paid his workers with gold and silver coins. Second, they’re upset that he treated his workers as independent contractors rather than as salaried employees.
Let’s look at the coin allegation.
Federal officials issue gold coins and silver coins. The coins are denominated in dollars. For example, the silver coin is a one-dollar silver coin. The gold coins are issued in various denominations, the largest being the 50-dollar American Eagle.
The U.S. government has declared that these coins are legal tender at their face value. In other words, suppose a person wants to buy a concert ticket that costs fifty dollars. He can take his American Eagle gold coin and tender it to the ticket seller. Under the law, the ticket seller must accept the gold coin in payment of the ticket.
Now, most every intelligent person knows that a buyer would never do that, at least not today. Why not? Because in the marketplace that one-ounce gold coin is worth about 1,000 dollars in Federal Reserve paper money, which is also considered legal tender.
Nonetheless, the law is the law. If the buyer wishes to use his gold and silver coins at face value, he is perfectly within his legal rights to do so.
So, here’s what Kahre did. He offered his workers a rate of pay based on the face value of gold and silver coins. For example, suppose Kahre and a worker had agreed on annual pay of 50,000 dollars in paper money. Kahre then says to the employee, “Look, instead of paying you 50,000 dollars a year, I’ll pay you 2,500 dollars a year, payable in 50 American Eagle gold coins”
The worker says, “Fine.” Why would the worker do that? Because he’s just as well off as if he had accepted the 50,000 dollars in paper money because he can sell the coins in the marketplace for 50,000 dollars in paper money.
But there are some major differences for the worker. For one thing, the worker’s annual income is 2,500 dollars rather than 50,000 dollars. That places him under the threshold that requires him to file an income tax return. For obvious reasons, that would not sit well with the IRS. Read Entire Article
By Jacob G. Hornberger