New proposed laws in the US could revive gold and silver
Bills filed in the Oklahoma and Missouri assemblies for the 2024 legislative session would eliminate state capital gains taxes on the sale of gold and silver. The laws would also take other steps to treat gold and silver as money rather than commodities.
The passage of these bills would eliminate state capital gains taxes on the sale and exchange of gold and silver bullion which would not be considered generically commodities, but at the level of currencies.
Both of these states are already among the 42 that do not levy taxes on the sale of gold and silver bullion.
Tax exemption on the sale of gold and silver bullion reduces the cost of investing in precious metals. Furthermore, it is a step towards treating gold and silver as money and not as commodities. Taxes on gold and silver pose a barrier to using gold and silver as money, as they increase transaction costs.
A tax on gold and silver, if these are considered money, would be like a tax on the exchange of banknotes. By eliminating this tax on the exchange of gold and silver, Missouri and Oklahoma would treat the metal as money rather than a commodity. This would represent a small step towards the restoration of gold and silver as legal tender and would cast little doubt on the monopoly of the Fed, the Central Bank, on the issuance of currency. A move that US libertarians, like Ron Paul, would greatly appreciate.
For libertarians it would involve destroying one of the various state monopolies and would also reconstitute "healthy" money, i.e. money based on a real value. The problem, if anything, would be that even this real and intrinsic value, in reality, is linked to speculative movements, exactly as happens with any other raw material, as demonstrated by the price:
Under the provisions of the Missouri bill, gold and silver in physical or electronic form would be legal tender and would be due for payment of all debts incurred in the State of Missouri. The State would be required to accept gold and silver for the payment of public debts. Private debts could be settled in gold and silver at the discretion of the parties.
In practice, this would allow Missouri citizens to use gold or silver coins as money and not simply as investment tools. In practice, gold and silver would be equated with Federal Reserve notes.
Oklahoma took a similar step in 2014. Utah and Arkansas also consider gold and silver legal tender.
The Missouri bill also includes provisions authorizing the state to invest in gold or silver “in an amount greater than or equal to 1 percent of all state funds” and to expressly prohibit any state agency, department, or political subdivision from seizing bullion gold or silver.
A historical legal basis
Article I, Section 10, of the United States Constitution states: “No State shall… make any thing but gold and silver coins as money of exchange for the payment of debts.” Currently, all debts and taxes in the United States are paid either with Federal Reserve Notes (dollars), authorized as legal tender by Congress, or with coins issued by the United States Treasury – very few of which contain gold or silver.
The Federal Reserve has obviously overcome this system, but libertarians see this position as an abuse of the powers of the Federal State and would like to overcome it by reintroducing precious metal coinage.
Repealing the taxes breaks down one of the fiscal barriers to the use of gold and silver as money, and could also begin the process of abolishing the Federal Reserve's fiat monetary system by attacking it from the bottom up – taking away its by working to make its functions irrelevant at the state and local levels, and by laying the groundwork for undermining the Federal Reserve's monopoly by introducing competition into the monetary system.
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This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/nuove-proposte-di-legge-negli-usa-potrebbero-rilanciare-oro-e-argento/ on Tue, 26 Dec 2023 11:00:16 +0000.