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IPFS News Link • Currencies

OMG: “California Won’t Accept Its Own IOUs”

• Investment Watch
Small businesses that received $682 million in IOUs from the state say California expects them to pay taxes on the worthless scraps of paper, but refuses to accept its own IOUs to pay debts or taxes. "Instead of seeking funds through proper channels, the State has created a nightmare," the class says. "Many of these businesses will not survive if they are required to wait until October 2009 to have these forced IOUs redeemed by the State." The class claims the state is violating the Fifth and Fourteenth Amendments. It demands that California be ordered to honor its own IOUs, plus interest. They are represented by William Audet.

5 Comments in Response to

Comment by Don Duncan
Entered on:

Why are the businesses paying sales tax when no sale has taken place? A sale is not complete until: 1. A service or product is rendered. 2. Remuneration is received.  An IOU is not payment, it is a promise to pay. I assume the businesses are paying because they are afraid of losing the gov't business or just because they are too timid to resist an irrational, illegal gov't demand. If they had just said no when the tax was demanded, the gov't would have sued them and they could have counter sued with less expense and quicker results.













Comment by foundZero
Entered on:

Wait, you mean to tell me the state that is totally broke can't honor an IOU? Who'd have thought that was possible?

I thought they were going to close the budget gap by making another Terminator movie. I guess Hollywood doesn't take IOUs either.

Comment by William1950
Entered on:

 That will be the O'man's problem in the near future.  China will not accept US paper money because it has no real backing.

Comment by DagnyTaggart
Entered on:

I hope this does go to court, at some point it may force someone to actually READ the Constitution. 

 (No State shall; emit Bills of Credit, make any Thing but gold and silver Coin a Tender in Payment of Debts)

Comment by Powell Gammill
Entered on:

Now this is one of the sweetest stories I have read in a while.  When I stopped laughing, I wrote this.

Never trust the government with anything accept collecting your earnings.  And dealing with you if you complain to publicly.

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