The discovery that a man who’d died at Nevada with $200 in the bank had a stash of gold bars and coins in his ramshackle home has the tax authorities looking for a windfall. The authorities are estimating that the value of the gold bars and coins discovered a month ago in the home of the late Walter Samaszko Jr. at $7 million, according to the Associated Press. That’s based just on the weight of the gold. There’s also the possibility that the coins, some of which are from exotic places like England and Austria, could be worth radically more than their weight in gold. In any event, the AP quotes the Carson City Clerk, Alan Glover, as saying the IRS wants a share.

For those of us troglodytes who persist in thinking of gold as money, this raises the question of the tax implications of falling prices. If prices fall, should an individual incur a tax? If Miser Samaszko started hoarding gold when he first moved into his house, which was in the 1960s, it would have been a time when the dollar was defined by law and treaty as being a 35th of an ounce of gold. Since that time the price of a loaf of bread has dropped to less than an 1,100th of an ounce of gold from the 116th of an ounce of gold that the loaf was valued at back then, according to our rough estimate based on a chart issued by a Web site called the Free Bullion Investment Guide.

The value of gasoline, houses, beds, and even mattresses, under which persons like the sage Samaszko tend to keep their gold, have also been plunging. The question is this: If the price of these things keeps plunging to ever smaller amounts of gold, does the miser owe a big part of his gold to the IRS? It would not have been such a question had had the miser kept his money in dollars, because the value of the dollar would have plunged right along with the value of the house, the garage, the bed, the mattress and the bread — maybe the dollar has plunged in value even more than some of those things. But the value of the gold money that the miser kept didn’t fall. No wonder the IRS is licking its chops.

This question — what is to be done about this lust of the IRS to get its hands on a share of people’s gold and silver that doesn’t lose its value when government issued money does lose its value — turns out to be a hot one. The Sun is prepared to predict that it’s going to get hotter with every quantitative easement by the Federal Reserve. It is bothering some states so much that they are starting to look at removing the taxes that they have been putting on the failure of gold and silver coins to lose their value. Utah has already done this. Utah’s junior senator, Michael Lee, has, along with Senators DeMint and Paul, introduced legislation in the Congress in Washington to remove federal taxes on the failure of gold and silver coin to lose their value. It is a tragedy for Walter Samaszko that he didn’t live to see the measure get put into law.