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  Kahre’s Conviction Is a Sad Day for America
by Jacob G. Hornberger
Last week, Las Vegas businessman Robert Kahre, the man who paid his workers in gold coins and silver coins, was convicted on all 57 counts of tax evasion. Forty-eight years old, he now faces the rest of his life in prison. His girlfriend and mother of his four children was also convicted. Sentencing will be in November. There is something seriously wrong with a society that is convicting and jailing people like Robert Kahre, Michael Milkin, Martha Stewart, and Joseph Nacchio. As the Russian people have experienced so well, this is what a socialist and interventionist society ultimately ends up doing — punishing ordinary business people for violating economic crimes and tax crimes, crimes that would be nonexistent in a genuine free-market society. If Kahre had been living sometime between 1787 and the early part of the 20th century, he wouldn’t have been convicted of income-tax evasion. The reason? Our American ancestors understood that an income tax and an IRS were antithetical to a free society. That’s why the United States was income-tax free for more than a century. Then the progressive income tax came to America, along with all the socialist and interventionist schemes it funds and the myriad of economic crimes and tax crimes by which government officials are able to keep businessmen in line. But it’s not just the IRS that was upset with Kahre. Lurking behind his prosecution is another federal agency, one that is just as powerful and destructive, if not more so, than the IRS — the Federal Reserve. Suppose a person owes one hundred dollars in income taxes to the IRS. Let’s say he has inherited 5 gold coins issued by the U.S. mint, each one having a face value of $20. Let’s assume that each gold coin weighs one ounce and that the person is able to sell the coin in the marketplace for one thousand paper dollars. That means that the person’s 5 gold coins have a value of 5 thousand paper dollars. Let’s assume that the person sends in his five $20 gold coins to the IRS, in payment of his one-hundred dollar tax bill. Will the IRS issue him a refund, representing the difference between the fair market value of the coins and the amount of the tax owed, i.e., 4,900 dollar bills? Absolutely not. The IRS will say that the coins are legal tender at face value. They will keep the coins, sell them, and pocket the difference. But as Kahre has demonstrated, the government’s representation that the gold coins are legal tender is false and fraudulent. Kahre and his workers struck a deal in which he agreed to pay his workers, say, 5 gold coins. That meant that their income was one hundred dollars. But the IRS and the federal prosecutors cried, “No! For purposes of the IRS, the workers are required to report the free-market value of the coins, not their face value.” In other words, those gold coins and silver coins are not legal tender after all. It’s all just a charade, one that Kahre had the audacity to expose. Why is a $20 gold coin worth one thousand paper dollars instead of twenty paper dollars? That’s where the Federal Reserve comes into the picture. At one time, prior to the creation of the Federal Reserve, a $20 gold coin did trade for 20 paper dollars. In fact, the real money was the gold coin and the twenty-dollar bill was nothing more than a promise to pay the gold coin. Then the U.S. government called into existence the Federal Reserve System, nationalized and confiscated people’s gold, and decreed a paper-money standard. Over the decades, it printed gobs and gobs of paper money to fund its ever-increasing welfare-warfare programs. Thus, the reason that a twenty-dollar gold coin today exchanges in the marketplace for one-thousand paper dollars, instead of twenty paper dollars, is because the Federal Reserve has been flooding the marketplace, decade after decade, with paper money to fund the government’s operations. But the feds don’t like people figuring that out because it might cause them to begin wondering whether the Federal Reserve should be abolished for having inflicted so much damage on the American people through monetary debasement. Kahre exposed in a very real way what the Federal Reserve has done to our money. According to the Las Vegas Tribune Review, after his conviction Kahre said to the judge: “Your honor,” Kahre said when he stood to answer, “This last seventeen years of my life has been to get my issues” aired about taxation and the importance of a gold standard to back U.S. currency. “My life is basically over,” Kahre said, indicating that before sentencing he wants to “spend time with family and tie up some loose ends.”
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