Q: Did anybody ever think about WHY sovereign mints place such a low face value on their bullion products?
A: These low face values help ensure non-circulating bullion is used for its intended purpose as an investment or a collectible and never treated like an ordinary coin used to buy goods and services.
I don't think the mints set the value. Congress does with their delegated authority to do so.
The bigger question in my mind is why don't more people use these as a medium of exchange or even demand their employers pay them in real money.
The case of Thompson v. Butler
, 95 U.S. 694
(1877), establishes that the law makes no legal distinction between the values of coin and paper money used as legal tender
A coin dollar is worth no more for the purposes of tender in payment of an ordinary debt than a note dollar. The law has not made the note a standard of value any more than coin. It is true that in the market, as an article of merchandise, one is of greater value than the other; but as money, that is to say, as a medium of exchange, the law knows no difference between them.
So essentially Nick hires me to build him a deck. I contract with him to build that deck for 200 silver dollars. My gross income on that project is 200 dollars.
Let's say I do this lots of time throughout the year. At the end of the year my income after expenses is 9000 dollars. Since there is no requirement to file an income tax if your income is less than 14,000 dollars, you have earned 9000 silver dollars tax free. If silver is wroth 25 dollars an oz, that's 225,000 in federal reserve notes if converted.
Keep in mind the conversion to federal reserve notes is a taxable event. your cost basis would be 1 dollar and the sale price 25 so you have a capital gain of 24 dollars an oz for every oz you convert.
Another example would be that you are able to gift 14,000 a year (Maybe more now) tax free. Why not gift silver dollars.?