iTulip endorses the Fair Treatment for Precious Metals Investors Act

[DSpencer]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

Perhaps the transaction should be considered not a transaction at all, but changing the form of money, like exchanging a $20 bill for two $10 bills, or moving money from a checking account to a brokerage account. You make a great point, Finster...

That is the key part. This would seem to be especially true if you were talking about gold or silver eagles which are in fact legal tender.

In fact, if you were a real crazy person, you might even do something wacky and quote the constitution:

No state shall enter into any treaty, alliance, or confederation; grant letters of marque and reprisal; coin money; emit bills of credit; make anything but gold and silver coin a tender in payment of debts;...

And then if you were that weird you might claim that gold and silver coins are the only truly legal tender. And then you'd wonder how the only constitutional form of money is taxed as a collectible. But that would make you crazy because we all know that judges are infallible and they've said this is A-OK so we shouldn't bother trying to read all those silly words because we'll just get confused.

[rogermexico]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

voted the 1000 times option but that's not it, either... poll needs an infinity option.

bought gold & silver w/itulip & are both up > 5x... if that's manipulation i say... keep up the good work, boys! taxes, on the other hand, will take $4,400 out of every $10,000 of invested principle... or 44%. what do i get if I divide 44% loss to taxation by 5x gains from/despite 'manipulation'?

'losses' due to manipulation... it's a nonsense poll question. the folks who complain about market manipulation aren't buy & hold gold & silver investors... they don't have enough $$$ in either metal to care about taxes... they're trying to make $$$ by trading gold & silver & are pissed off because they stumble onto the wrong side of trades vs the big, bad banksters.

MM, I think this percentage of initial investment terminology is confusing and misleading.

I think I get the "per principal" math - but comparing taxes bases on the initial investment is senseless for making comparisons. Taxes are on the gains, not on the principal, so percentages of the initial investment are not independent of the gains.

For instance, if your tax rate is 100% on the gain, but there is no gain, the percentage of the principal you pay with 100% confiscation is now zero. So how is that helpful? Why not just compare tax rates to avoid confusion?

Max rate is 28% as a collectible or 15% (20% if Clinton rates return) as regular cap gains.

The difference is a 13% reduction (absolute) or 47% (in the rate) , unless Bush II tax rates expire, and then it goes back to 8% and 29%.

[thriftyandboringinohio]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

Considering that gold and silver were supposed to be money themselves, they shouldn't be taxed at all...

Excellent point. None the less, when I convert my Federal Reserve Notes into high quality scotch or a king-size mattress, I pay a tax on the transaction. No reason I shouldn't pay tax when converting gold into FRNs. The only issue of fairness is the tax rate; we shoudn't pay extra harsh taxes on the gold-to-currency transaction.

Perhaps the transaction should be considered not a transaction at all, but changing the form of money, like exchanging a $20 bill for two $10 bills, or moving money from a checking account to a brokerage account. You make a great point, Finster...

[DSpencer]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

There is already a big black market in gold. I wonder if itulip folks would be willing to talk about what they know. I am quite sure I can sell 30 oz of gold in the states and not report it or get caught.

I agree that it's probably possible at the moment but while 30oz is a lot to some people it won't help people with significant gold holdings. I can't imagine someone selling dozens of kilo bars for cash.

It's also not likely to get any easier. There's already reporting on large (10k + I believe) cash transactions and now the 1099 legislation. So on one hand they make the taxes unfair and then on the other hand they make sure you can't avoid them by requiring lots reporting information.

I just wish I had the dozens of kilo bars to worry about.

I certainly don't expect a lot of people on iTulip to post about how they cheated the IRS...

[Thailandnotes]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

There is already a big black market in gold. I wonder if itulip folks would be willing to talk about what they know. I am quite sure I can sell 30 oz of gold in the states and not report it or get caught.

[metalman]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

voted the 1000 times option but that's not it, either... poll needs an infinity option.

bought gold & silver w/itulip & are both up > 5x... if that's manipulation i say... keep up the good work, boys! taxes, on the other hand, will take $4,400 out of every $10,000 of invested principle... or 44%. what do i get if I divide 44% loss to taxation by 5x gains from/despite 'manipulation'?

'losses' due to manipulation... it's a nonsense poll question. the folks who complain about market manipulation aren't buy & hold gold & silver investors... they don't have enough $$$ in either metal to care about taxes... they're trying to make $$$ by trading gold & silver & are pissed off because they stumble onto the wrong side of trades vs the big, bad banksters.

[Chris Coles]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

This debate is pretty off topic so I'll try to swing it back around...

From this thread:


From your other thread you mentioned:
I don't want to be rude, but at this point I have to believe this whole idea is a test designed to see how much people will debate a silly idea full of grandiose goals and complete nonsense as content.

How is the Bank of England, the CENTRAL BANK, implementing a PLAN to do X, Y and Z in order to fix A, B and C not central planning?

The absurdity of "vanishing bonds" being given to anyone who can scribble out a business plan without risking any of their own money is beyond my comprehension.

You seem like an honest, well-meaning person and I've tried to understand this idea as you've obviously put a lot of thought into it. But all I can conclude is that the end result is a mixture of your personal struggles to get capital investment, a desire to have a brilliant plan that fixes all problems immediately and a scheme so elaborate you've convinced yourself it would work if only someone (in government) would listen. Sorry if that's offensive, but I take offense to this type of plan being labeled as "free enterprise".

If you want free enterprise, the only proper proposal is to eliminate the current barriers to it, i.e. the laws, regulations and excessive taxation that inhibit the free market. In particular laws that make taxes inconsistent and unfair such as the ones that this legislation seeks to (partially) reverse. These laws punish the savers that are the ones behind capital investment.

So in summary....I also endorse the fair treatment for precious metals investors act despite it not going nearly far enough. Gold is money and I don't think it should be taxed at all....aaaand we're back

At first sight I should run and hide; but along the road I set out upon over the last few decades I came across a simple fact that, today, is not in dispute.

There is NO accepted mechanism for the investment of equity capital under free enterprise terms ... anywhere. The Governors office of the bank of England says they "fully understand the need for equity". .... but ..."are unable to help".

If you turn to the present and look in detail at Quantitive Easing, (QE), you will see all central banks passing out vast sums of money, hundreds of billions no less, in various forms not familiar on the high street, to the existing banking industry and an ongoing discussion about how to continue to "prop" up the present financial system. The expectation is, without further QE, the Western economies will fall back into a second phase reversal.

So there is a general recognition that there is a need to find a road out of the mess we are all in; which in turn prompted Mervyn King to state, publicly, the need for a detailed plan. It was in response to that public request that I came up with the idea of first of all asking the Bank of England for the chance to meet with them to discuss how to raise the funds for such a plan, along the lines I outline with my own thinking about The Capital Spillway Trust. My thinking being that, as we do not have an accepted, agreed by everyone, mechanism to invest equity capital into free enterprise, (everyone thinks we have one, but the truth is we do not have one), then perhaps my own input would have some value.

Not unsurprisingly, they would not meet with me; but it is true to state the dialogue was not entirely negative. I repeat, they fully understand the need for equity.

All my thinking centres upon the simple fact that there is no capacity for investment at the grass roots of the Western nations. There is no spare capital in the form of savings, or spare tax income, or in the form of spare capacity to borrow, neither by government or the ordinary citizen. So the challenge is to think of a method that will both serve as a mechanism for QE, but without the money being automatically distributed back into the existing banking system.

To spur a conversation, I decided to provoke new thinking by devising the idea of a "Vanishing Bond" that will serve as QE, but NOT remain in circulation and even more importantly, not be given to the banks, but instead, would be directed into new job creation. The more I thought about the vanishing bond, the more I saw the chance for the shadow banking system to offload all their dross, of which I am certain, they have a lot on their hands.

The whole idea of the Vanishing Bond is to create a mechanism that simply acts as a transfer mechanism, transferring prosperity presently locked into the shadow banking system, back into the general population, over a period of time, as new prosperity.

If you can tell me of another mechanism that will quickly; NOT over many decades, replenish the missing prosperity at the grass roots of society that is needed to allow the normal process of job creation to re-start..... then tell us all about it.

As an inventor, I have become used to being laughed at; very few can handle the idea of a new way of looking at existing processes; even less can actually accept the changes needed. It is thus very interesting indeed to see that Mervyn King seems to be showing the capacity to also drive forward with new thinking of his own as we can see with his recent speech. http://www.itulip.com/forums/showthr...Again?p=179119

All I have done is provoke a debate about a missing element in the funding of new job creation. Yes, anyone can and may criticise what I am trying to do, or the way I suggest implementing my thinking; but at least I am trying to do something to overcome the problem.

There are conversations ongoing, in the background, relating to the value of some telecom patents that were granted to me that may give me the impetus to show the way forward and the value of my thinking by being able to put my money where my mouth is; so perhaps the questions you raise will be answered sometime soon.

But me; I have a very clear conscience. When I left school at 16 yrs, 1960, there were plenty of jobs, today we see reports like this last night on Channel 4 TV. http://www.channel4.com/programmes/d...es/4od#3136470 Oh! and I challenge you to watch the whole hour without flinching. These kids desperately need jobs now, not government welfare, but local people prepared to work at creating new jobs for the majority. The only thing lacking is the available equity capital; a simple fact the Bank of England agrees with. All I am trying to do is find a workable way forward.

[Finster]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

Considering that gold and silver were supposed to be money themselves, they shouldn't be taxed at all. Did they really go up in value or did your dollars go down?

At least putting them on the same footing as stocks would be a step in the right direction. Aside from being more fair, it would simplify taxes as well. The IRS considers ETFs like IAU and SLV to be "collectibles" like the metals themselves for determining your tax obligation, but because they are really funds, your 1099 comes adorned with numerous small phantom transactions at the end of each month when you neither bought, nor sold, nor received a distribution. What a mess!

Yes, let’s please fix this now!

[DSpencer]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

This debate is pretty off topic so I'll try to swing it back around...

From this thread:

And I must add, my proposals for The Capital Spillway Trust do not in any way involve the use of government, funding or input. The entire exercise must be driven from the private sector.

From your other thread you mentioned:

I propose the Bank of England create a completely new capital bond; a Vanishing Bond.

The Bank of England should immediately create and make available, as a national fund, £450B of new Vanishing Bonds at zero. 0%

I don't want to be rude, but at this point I have to believe this whole idea is a test designed to see how much people will debate a silly idea full of grandiose goals and complete nonsense as content.

How is the Bank of England, the CENTRAL BANK, implementing a PLAN to do X, Y and Z in order to fix A, B and C not central planning?

The absurdity of "vanishing bonds" being given to anyone who can scribble out a business plan without risking any of their own money is beyond my comprehension.

You seem like an honest, well-meaning person and I've tried to understand this idea as you've obviously put a lot of thought into it. But all I can conclude is that the end result is a mixture of your personal struggles to get capital investment, a desire to have a brilliant plan that fixes all problems immediately and a scheme so elaborate you've convinced yourself it would work if only someone (in government) would listen. Sorry if that's offensive, but I take offense to this type of plan being labeled as "free enterprise".

If you want free enterprise, the only proper proposal is to eliminate the current barriers to it, i.e. the laws, regulations and excessive taxation that inhibit the free market. In particular laws that make taxes inconsistent and unfair such as the ones that this legislation seeks to (partially) reverse. These laws punish the savers that are the ones behind capital investment.

So in summary....I also endorse the fair treatment for precious metals investors act despite it not going nearly far enough. Gold is money and I don't think it should be taxed at all....aaaand we're back

[Chris Coles]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

Now I get it, all this humour is because of the election tomorrow. No!

[DSpencer]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

Careful there, DSpencer.

By writing an interesting, coherent, multi-paragraph blog posting, you have delayed my trip to the local mall a couple of minutes, thus delaying my next purchase. This affected inter-state commerce.

Is that a SWAT team outside your window?

Lucky for me, my office doesn't have a window!

Just to be sure I don't offend the interstate commerce gods I'll go home and burn my garden and board up my fireplace so that I don't interfere with the agriculture and gas heating industries.

[Chris Coles]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

This is an interesting thought. In the US, you could (foolishly) use american eagles to buy things at face value. Could someone sell me a used car for 500 dollars if I paid in $50 one ounce gold eagles? Would I report a capital loss? Would the gold eagles cease to be an investment? What would I pay sales tax on?

I guess the bottom line is it's just another honor system and if it was ever reviewed the IRS would say it's tax evasion and you'd lose. This is just another bizarre scenario created by legal tender laws that are only enforced in the government's favor.

To clarify, I meant to say use the Gold coins at their full value, not their face value.

[Chris Coles]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

Chris,

While the first part of this paragraph is vague, it strongly implies some kind of statist, centrally-planned, anti-free enterprise government action that takes someone's assets and gives them to somebody else. If I'm wrong, please clarify. If not, how can you possibly follow that sentence with one about how others don't understand free enterprise?

First of all an apology to Rogermexico, it is true to admit I got a little hot under the collar this morning. I apologise. But that in turn gave me a better insight to my own thinking. (Nothing like rolling straight out of bed and blowing off a little steam to get a better handle on a debate). To answer your immediate question above; this is not any form of statist, anti free enterprise centrally-planned government mechanism. Instead, I believe that I am debating how to access a market for investment that has been known about for a long time, but no one seems to have been able to create a worthwhile mechanism to access it. Free Enterprise, where the manager of the business owns the business. My hesitant first steps, (and the odd stumble), are a debate about how to make this new market work for the long term benefit of everyone. Please bear with me while I explain.

There are two separate banking systems today, one is the visible banking and investment system, closely linked to government; the other curiously titled: Shadow Banking. I believe that the shadow banking system holds a potential answer to our problems. As I see it, shadow banking entails all the off (conventional banking system) balance sheet assets in the form of a bewildering variety of bonds and securities such as CDO’s etc. etc.; much of which is what we on the outside have described as vapourware. By the same token, I also suspect that　they would agree with that analysis...... but it sits there on their balance sheets and is accounted for. But now look at this from another viewpoint; the shadow banking industry must be as deeply affected as we are with the ongoing instability of the visible financial system. That the truth is they too want the nation to succeed and they too wish for more prosperity right across the nation - for that prosperity underpins their own potential for success.
　
What I am suggesting is that they should also recognise the need to re-introduce new prosperity back into the nation, but dislike, (as we all do here on iTulip), any idea of the government becoming involved. So what I have proposed is the creation of a massive fund of what I describe as Vanishing Bonds. I propose that the shadow banking system take their, (shall we say, less than perfect paper assets); and convert them into a new form of bond that is specifically designed to transfer, over the long term, prosperity back into the grass roots of the nation, any nation.

I have already proposed for example here in the UK we create a £450 billion Vanishing Bond Fund with the aiming point of financing the creation of 6 million private sector jobs on free enterprise terms. By the same token, if the US needs 30 million new jobs, then the US fund needs to be in the region of $3 Trillion.

My proposal identifies the existence of a new market for investment and I believe that I have devised a completely new set of rules to address that market. That by taking the value of rubbish assets and converting them to vanishing bonds, we can use these new bonds as value within the outer, conventional　banking system, but now as new equity capital and working capital investment into new job creation under free enterprise terms.

So this is not any form of statist, centrally planned mechanism. It is instead, a completely new form of financial institution. I call it The Capital Spillway Trust. Local job creation for the people, managed by the people.

The underlying principle is to change the mindset of local community investment from one where one seeks to find a business prospect that may be turned over and sold on, traded, ASAP for M&A; to one where the recipient is left in total control of their own business and the fund has every intention of remaining at arms length to permit them every chance to reach stability. And to do that both sides have to accept new rules.

The investor has to become a part of a local community of savers where everyone takes risk and reward equally to spread the risk; with the long term aim of increasing the local community prosperity; while, at the same time, accepting that the recipient of the investment is left free. To achieve that, the investor must change their source of income from one stemming from a trading function to one of a long term dividend function. Their investment income stems from dividends, not trading.

By the same token, the new business founder has to accept severe constraints upon their reward; both short term and long, to ensure the long term investors gain an acceptable income for their input; while also taking much greater responsibility for everyone in their local communities. They are, after all, the source of the future prosperity for everyone, both their investors as well as their employees.

When you come down to it, today, everyone sees investment as something…. What did you call it? "action that takes someone's assets and gives them to somebody else" But surely that is EXACTLY how classic Capitalism should function? You give equity capital and receive dividend income. Classic equity capital investment is surely about retaining prosperity within a local community; not about selling that prosperity to another nation?

Please think about that?

The Capital Spillway Trust response to the Green Paper; Financing a Private Sector Recovery was placed up on iTulip for ongoing debate here: http://www.itulip.com/forums/showthr...ector-recovery

Some very salient points

The new business will only require the founders pay the initial costs of forming the company and producing a viable business plan. This will be a once in a lifetime opportunity.

You will hang, right out in full view; the potential for ANYONE with get up and go, to create a profitable, free enterprise based, private sector, job creating business for themselves.

Not a single penny of their existing savings risked by anyone.

Not a single penny invested without a new job being created.

Not a single penny spent by any government employee; all the money goes directly into new, free enterprise based, private sector job creation, right at the grass roots of the nation.

The necessary legal and accounting framework is already in place in each local community.

The clear potential for a massive reduction in welfare costs allied to a corresponding increase in tax income. Perhaps for the first time in generations, the government’s books will balance.

[ThePythonicCow]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

all it takes is for one stroke of a government pen to close it down? Interstate commerce clause modern interpretation = government controls all commerce.

Careful there, DSpencer.

By writing an interesting, coherent, multi-paragraph blog posting, you have delayed my trip to the local mall a couple of minutes, thus delaying my next purchase. This affected inter-state commerce.

Is that a SWAT team outside your window?

[DSpencer]

Re: iTulip endorses the Fair Treatment for Precious Metals Investors Act

In the meantime, surely there is no reason why anyone cannot exchange their Gold as a bulk commodity for Gold coins and then, instead of selling them, simply remove them from storage and use them as currency? What would the tax implications be if, instead of selling the Gold for profit, producing a capital gain, you use them to purchase whatever you need at the time?

This is an interesting thought. In the US, you could (foolishly) use american eagles to buy things at face value. Could someone sell me a used car for 500 dollars if I paid in $50 one ounce gold eagles? Would I report a capital loss? Would the gold eagles cease to be an investment? What would I pay sales tax on?

I guess the bottom line is it's just another honor system and if it was ever reviewed the IRS would say it's tax evasion and you'd lose. This is just another bizarre scenario created by legal tender laws that are only enforced in the government's favor.