Idaho Ends income Tax on Precious Metals, Arizona is Up Next
Gold and Silver Are Money
In a first and significant step towards the remonetization of Gold and Silver, Idaho voted tonight to remove income tax on precious metals. This is the first step in what will likely be a cascade of other states following suit.
Last week we discussed here the Arizona Senate Finance and Rules Committees' calling out the Fed on Gold Taxation by considering legislation (HB 2014) officially defining gold, silver, and other precious metals as legal tender. The bill also exempts transactions in precious metals from state capital gains taxes, thus ensuring that people are not punished by the taxman for rejecting Federal Reserve notes in favor of gold or silver.
The main arguments in favor of removing taxation on Precious metals can be summarized as this:
- taxation on any appreciation in Gold's value undermines its value as an inflationary hedge
- If gold and silver are priced in USD, then their price changes are a reflection on the USD buying power, nothing more
- You don't pay tax when the buying power of the USD increases when buying EU goods. So why should Gold be treated differently?
- The removal of income tax and capital gains tax puts Precious Metals on a level playing field with FIAT currencies
HB 206 Page 1
War Has Started
Our Quick Analysis says two types of states will get in line behind Idaho.
- States in which a significant portion of their GDP is based on the mining of Precious Metals like Arizona, Nevada, and Utah
- Arizona votes soon on its version called HR Bill 2014. Utah has already passed its own version
- States who have a strong Libertarian streak running through them, like Idaho,other Pacific Northwestern states and Maine
The wild card states are falling in favor of Precious Metals too. States like Alabama and Tennessee are in the process of removing sales tax on Precious Metals. In total almost 20 states have already taken that step.
We feel that this is the beginning of a trend, not a toothless attempt. The people are speaking. All in all there is a unity across party lines, geography, and state industry. This is not going away. Bottom up movements, especially those in a populist environment do not go away. It could end with grass roots pressure on The Fed to not only end Federal taxation on Gold and Silver, but an actual Fed Audit
The Pay-Off Section
Zerohedge By an overwhelming 56-13 margin, the Idaho House of Representatives today voted to end all Idaho taxation on precious metals, e.g. gold and silver coins and bars. Bill sponsor Representative Mike Moyle (R) and the entire Republican caucus voted for the measure. If the Republican-controlled Idaho Senate follows suit and Governor Butch Otter (R) signs the bill, Idaho citizens will better be able to use gold and silver as a form of savings which protects against ongoing devaluation of America’s currency.
Backed by the Sound Money Defense League, Idaho Freedom Foundation, Money Metals Exchange, and grassroots activists, HB 206 expands Idaho’s existing sales tax exemption to end Idaho income taxation of sales of “precious metals bullion” and “monetized bullion.”
History shows that, if individuals have the freedom to choose what to use as money, they will likely opt for gold or silver.
Of course, modern politicians and their Keynesian enablers despise the gold or silver standard. This is because linking a currency to a precious metal limits the ability of central banks to finance the growth of the welfare-warfare state via the inflation tax. This forces politicians to finance big government much more with direct means of taxation
America’s 46-year experiment in fiat currency has gone exactly as followers of the Austrian school predicted: a continuing decline in the dollar’s purchasing power accompanied by a decline in the standard of living of middle- and working-class Americans, a series of Federal Reserve-created booms followed by increasingly severe busts, and an explosive growth in government spending. Federal Reserve policies are also behind much of the increase in income inequality.- Ron Paul
VIDEO of HB 206
“According to the U.S. Constitution, Article I, Section 10, there is only one thing that a state can declare as currency if they think that our federal currency is going out of whack and some might argue that they think our federal currency is going out of whack already,” said Representative Ron Nate (R) from the House floor.
“If we are not going to allow people to declare capital losses on their Federal Reserve Notes or their dollar holdings, it would also be unfair to tax people for their gold and silver holdings. Gold and silver is an alternative to holding Federal Reserve Notes and it is the ONLY alternative that the U.S. Constitution says that the state can allow as another currency. It’s unfair to tax it just as [it’s unfair] to tax losses on Federal Reserve Notes” continued Rep. Nate.
Gold and Silver are not investments that appreciate and therefore should be taxed. They are money whose value is expressed in terms of other currencies. Stefan Gleason of the Sound Money Defense League concurs.
“Policies that discourage precious metals ownership reduce the likelihood that Gem State citizens will take prudent steps to insulate themselves from the inflation and financial turmoil caused by the Federal Reserve System,” said Stefan Gleason, director of the Sound Money Defense League. “Precious metals bullion is already exempt from Idaho’s sales tax. HB 206 removes the final disincentive in Idaho tax law that stands against ownership of the monetary metals.
Ron Paul's Legacy may just be getting started. Dr. No said just last week that Passage of Arizona's HB 2014 (and Idaho's HB 206) would also send a message to Congress and the Trump administration that the anti-Fed movement is growing in influence. Thus, passage of these bills will not just strengthen movements in other states to pass similar legislation; it will also help build support for the Audit the Fed bill and legislation repealing federal legal tender laws.
ZH makes our bulleted points above quite clearly: Under current law, the taxpayer who sells their precious metals may end up with a capital “gain” in terms of Federal Reserve Notes – commonly referred to as “dollars.” This capital ‘gain’ is not necessarily a real gain. It’s often a nominal gain that simply results from the inflation created by the Federal Reserve and the attendant decline in the dollar’s purchasing power. Yet this nominal gain is taxed at the federal level – and taxed again by Idaho.
Under HB 206, precious metals gains and losses reported on a taxpayer’s federal income tax return would be removed from the calculation of the taxpayer’s Idaho taxable income.