Pay Your State Taxes in Federal Reserve Notes? Your State Violated Article I Section 10 of the U.S. Constitution!

Friday, April 16, 2010

Did your state withhold and/or accept payment from you for your state taxes in Federal Reserve Notes (i.e., paper dollars or bank accounts backed by them)?  If so, your state violated Article I Section 10 of the U.S. Constitution:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.

Federal Reserve Notes and checking, savings, credit card, etc. accounts that are backed by them are fiat money and not backed by gold or silver coin.  Therefore, if your state allowed forced you to pay your taxes (i.e., debt to the state) with Federal Reserve Notes, your state violated the Article I Section 10 constitutional prohibition disallowing states to "make any Thing but gold and silver Coin a Tender in Payment of Debts."

In fact, this clause of the U.S. Constitution is the key tenet in the Tenth Amendment Center's strategy for "Ending the Fed From the Bottom Up."  It was in fact most of the founders' (not Hamilton's of course) intent that the federal government would also be prohibited from printing fiat (not backed by precious metals) money as well.  Congress is given the power to coin money in Article I Section 8, which at the time of the founding meant specie (backed by precious metals) money.  Printing fiat money is not an enumerated power and is therefore unconstitutional.  Judicial activism on the part of the U.S. Supreme Court has allowed for Federal Reserve Notes to become fiat money, despite this being unconstitutional.

I really recommended reading the Tenth Amendment Center's article mentioned above, "Ending the Fed From the Bottom Up," for further discussion and enlightment on this topic.