Once upon a time in the kingdom of political torture a giant monster proclaims a golden edit. No small morsel can go untaxed; the goliath needs to be feed. No fowl can be allowed to go foul of the law. The docile chickens must be caged in their coop so that they have no alternative but to egest their excessive bullion from the bowels of their rump. Yes, Virginia, the giant is coming after your gold. This beast is ready to tear out your innards to get at your ingots. Thanks to Obamacare reportage of your every day, transactions will mount up to exceed the minimum.

“Section 9006 of the Patient Protection and Affordable Care Act will amend the Internal Revenue Code to expand the scope of Form 1099. Precious metals such as coins and bullion fall into this category and coin dealers have been among those most rankled by the change. Taking an early and vociferous role in opposing the measure is the precious metal and coin industry, according to Diane Piret, industry affairs director for the Industry Council for Tangible Assets. So every time a member of the public sells more than $600 worth of gold to a dealer, Piret said, the transaction will have to be reported to the government by the buyer.”

Remember the tale of Jack and his Obamacare Beanstalk wish?

Once upon a time, there lived a widow and her son, Jack. They lived in great poverty. One day the woman said: “Jack, we have to sell our cow. Take her to the market and make sure you get a good price.”

    Impoverishment the “New Normal”. Bring your 1099 form and fill it out.

On his way to the market, Jack met a man who persuaded him to give him the cow in exchange for a handful of magic beans.Beware he might be a tax collector and tricking you to break the law. When he came home, his mother became very angry. She didn't believe the magic beans were really magical and tossed them out of the window. Then she sends Jack to bed.

    What you see may not be what you get.

The next morning Jack saw that a giant beanstalk had grown exactly where his mother had thrown the beans. Jack climbed in it, he wanted to know what could be seen in the top.

The climb to the top involves hard work.

He was very surprised to find a castle there. A giant lived here. Jack hid in a pot to find out what kind of a giant he was. He heard him talk to his wife about his magic chicken that laid golden eggs. The giant enjoyed the eggs for their beauty. Apparently, gold was not valuable in his world. “I would know what to do with those golden eggs,” Jack thought.

The eternal alchemy dream, which even young boys aspires to possess.

He couldn't leave his hiding place until the giant had fallen asleep. He then grabbed the magic chicken, tucked her under his arm and ran out of the castle, as hard as he could.

Theft is not reserved to government giants alone. 

The next day Jack went back to the castle. He hid again in the pot. This time he heard the giant speak of his miracle harp. It fulfilled every desire. The giant wished for food, drinks and every now and then, he wished for a beautiful household item for his wife.Government budgets can never be too large with marvelous taxes schemes. When Jack heard this, he thought: “You ask so little. I would know what to do. I would ask for world peace and prosperity for all and for everyone to be joyful and happy. I would cure all diseases and no one would grow old and die. And if there was the danger of too many people, I would simply ask that the earth become larger, large enough for all people. But I am certain the earth is large enough for everyone.”

How naive the peasants are even with Obamacare the World Is Not Enough.

After the giant had fallen asleep again, Jack grabbed the harp and ran back to the beanstalk. But this time the giant woke up. He chased Jack who quickly slid down the beanstalk.

The lyre melody plays loud but the government goliath seldom gives up their rule. 

When he arrived at his house, jack took an axe and cut down the beanstalk. The giant saw him doing this and rapidly climbed back up. Now the connection between their worlds had been severed.

Distance from the beast is best but settle for that which governs least.

Jack and his mother and all people lived happily ever after, mainly because of the harp. For in the new world Jack wished for himself, golden eggs were only for decoration and everyone who wanted them could also have them.

That is why fables are called fairy tales.

Golden eggs are deemed property of the giant and peasants pay a hefty price if they want to keep the fruits of their own labor. This new attack on the nature of money and your own property is obvious. “The provision, scheduled to be implemented in 2012, is being opposed also by Rep. Daniel Lungren, R-Calif., who has introduced legislation to repeal that particular portion of the health care bill. Sellers of gold could also experience a nightmare if they don't understand what's going on, and the gold is considered revenue, as federal and state taxes would have to be paid, and FICA taken out after the fact.”

Unintended consequences are more like predetermined designs on rooting out any competing methods of commercial transactions. Barter, a time-practiced way to trade goods or services without the restraints of dealing in the fiat currency trap is in danger of becoming criminalized. The essential question is self-evident. Is your property your own or are you a mere junior partner with the government in your own business dealings? Paper trail record systems have the inevitable result of prohibiting voluntary commerce.

Local Currency Health Financing, like Ithaca HOURs would be doomed to the 1099 disease. The productive impact to the Ithaca community will be diminished. One of the primary functions of the Ithaca Hours system is to promote local economic development. Businesses who receive Hours must spend them on local goods and services, thus building a network of inter-supporting local businesses. While non-local businesses are welcome to accept Hours, those businesses need to spend them on local goods and services to be economically sustainable.

The next predictable consequence is the rise of the black market, or more appropriately described as the real marketplace. The burden of government extortion in every transaction leads to involuntary commerce. If every swap were deemed revenue, the entire country would be turned into a penal society of universal magnitude. The much-despised VAT tax is but a step away for producing businesses.

David Galland of Casey’s Daily Dispatch states, “The implications of this move transcend just the precious metals. Rather, this is a deliberate step in the direction of implementing a VAT – once the government has everyone reporting essentially every transaction, taking the next step is a snap.” If individuals are penalized in a private transaction, what is left of your personal wealth?

Gold is a symbol of a store of value. If you found a horde of gold coins when digging on your own property, would the government be entitled to their share of the find? Better yet, if you struck gold nuggets, and you owned the mineral rights to the property, would the government have the legitimate right to assess a claim on that discovery?

Still more absurd is that U.S. gold coins are legal constitutional tender. If they are money, the notion that a tax upon the transfer of the coin, just because the nominal value in Federal Reserve notes far exceed the face amount of the coinage, is obscene. The debasement of the currency and the preordained inflation that follows is the cause of the rise of the price of gold in paper dollars.    

Even the office of the National Taxpayer Advocate, a citizen’s ombudsman within the IRS, issued a report June 30 that said the new rule “may present significant administrative challenges to taxpayers and the IRS.”

The significance of Section 9006 of the Patient Protection and Affordable Care Act is that the Main Street economy will start to move towards a Flea Market appearance with cash, or the perceived equivalent, as the legitimate marketplace. If the public fears the loss of their head and adopts a chicken peep mentality, the government wins. Nevertheless, if a brood of roosters begins to fight to the death, the mark of the beast will fall like a ton of bricks.

According to the tax collector, Jack’s crime was not taking back the golden eggs, but his failure as a party for not filing a 1099 when he sold the cow. The magic chicken that lays the golden eggs is not a government creation. Only a productive and industrious private sector creates wealth. The State only wastefully consumes those riches. Which came first the chicken of the egg? For government, their answer is both came from their bastion of conquest.

The ogre stole the golden harp. "This is one of the nicest things I took from the knight." The beanstalk between you and government merits cutting down. All hand on your axes . . .

SARTRE – July 25, 2010