This passed across my desk and begged for a comment or two. The author's words in blue, mine in black:
This passed across my desk and begged for a comment or two. The author's words in blue, mine in black:
By Jeanpaul Cortez
Imagine if you asked a grocery clerk to break a $5 bill, and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another.
But try walking to a local precious metals dealer in more than 25 states and exchanging 20 Federal Reserve notes for an ounce of silver. If you do that kind of money exchange, you will get hammered with a sales tax. That’s the price you can pay for bucking the system and picking up a piece of the only true money mentioned in the U.S. Constitution.
So quick, students. Where has he gone wrong here? Can you name the ways?
Of course, sales taxes haven’t been around forever.
Revenue hungry government officials in the 1930s brought us the first broad based, general sales taxes. Kentucky and Mississippi were the first adopters, and it spread rapidly from there.
Unlikely as it may seem, these two states deliberately soaked their residents of more money than had ever been issued during those times when the Federal Reserve actually called in a third of the circulating money within about two years.
Today, sales taxes are part and parcel of any shopping experience, in 45 states in the Union. Whether you buy a shirt or a hamburger, tax collectors want a piece of the action and force merchants to collect anywhere from 2.5% to 7.5% on top of your transaction total and forward it to the bureaucrats and politicians in your state capital.
Putting aside whether taxes on consumer goods is right or wrong, charging sales taxes on money itself is beyond the pale. In effect, those states that collect taxes on your purchases of precious metals are inherently saying gold and silver are not money at all.
Come on students, who have we identified as an official of the Federal Reserve whose statements actually support this?
It’s not difficult to see how these laws negatively affect those who choose to protect themselves from inflation and financial turmoil by saving some of their money in precious metals. Investors won’t want to pay, for example, $100 in taxes on purchase of a $1,350 one-ounce gold coin. It’s a competitive marketplace, so buyers will often purchase online or even travel out of state to obtain their precious metals.
So pay attention, he's trying to save you some money.
Diversifying into precious metals tax free from an out-of-state national dealer such as Idaho-based Money Metals Exchange is a good option, because states are restricted in attempts to regulate interstate commerce. But state sales taxes reduce investors’ options and thereby have the negative effect of causing local dealers to lose business, threatening jobs and, even reducing those states’ overall tax revenues.
We're not sure exactly how this is correlated or verified as trade in precious metals is actually a lot smaller (though growing) than trade in more useful items.
Your Nominal “Gains” from Owning Precious Metals Are Taxed as Income
But the tax problem doesn’t stop at sales taxes. Income taxes are another way in which government bureaucrats penalize holders of precious metals. If you own gold to protect against devaluation of America’s paper currency, you may end up with a “gain” when priced in dollars. Not necessarily a real gain, mind you. It’s a nominal gain on which the government will assess a tax.
And what students did we say was our answer and why the proposal throughout this blog really is the ONLY real solution? Look, there are plenty out there with this rugged outdoorsman, rugged individualist mindset that imagine they can go it alone or the system has made them lose such confidence in themselves and in others that they think ditching civilization itself would almost be preferable to enduring any more of the present system. A lot of this sounds like whining to us. Real men devote themselves to devising their own realistic means of exchange, which does not require precious metals even if it is based on their prices. They band together to thwart the interests and desires of the destroyers.
At the federal level, your nominal gains on precious metals are taxed at the discriminatorily high 28% long-term capital gains tax rate. (Capital gains on other assets are taxed at 15% or 20%, depending on your income level). And the “gain” you receive from owning our constitutional money increases your taxable income at the state level too. Shame on you for diversifying away from those paper Federal Reserve Notes!
What have we told you all? Come on students, figure it out. The author surmises correctly that THEY deliberately want you to use THEIR preferred brand of THEIR money and if you do not, THEY will tax you for not doing so. How do we honestly regard this tax policy (instigated by the banking cartel from behind the curtains) whether we're a “gold bug” or not? As an act of war! On whose part though? Who is the alleged perpetrator of a cause for war? The monopolists in charge of THEIR money, which is falsely claimed to be ours and is not. It is the same with some people who claim to be something or someone they are not. Just the same.
States Are Eliminating Sales Taxes
on Precious Metals
Utah is the leader in rolling back unfair taxation on precious metals. Not only did the Beehive State repeal sales taxes, but it also exempted gains on certain precious metals from the income tax.
Mormons tend to be “gold bugs” anyway. It makes sense for this kind of resistance to get started there.
Indiana lawmakers have also taken steps to roll back taxation on money. Effective July 1 of this year, House Bill 1046 became law, and Indiana will no longer collect a sales tax on purchases of precious metals by its residents.
E. C. Riegel was from Indiana, but he was certainly not a "gold bug" and neither was Arthur Kitson, whose work Riegel probably never even knew about. This state tends to favour certain kinds of independence from outsiders.
State Senator Brandt Hershman (R-IN) argued that the removal of the sales tax also encourages people to save for their retirement by investing precious metals into Individual Retirement Accounts, or IRAs. He highlighted one of the many reasons for the bill, saying, “If you buy a stock or bond or put money into a savings account, you don’t pay sales tax on those items. But you were paying sales tax on these.”
Again we have to ask the basic question; just what in fact are precious metals coins?
Following in Indiana’s footsteps, Tennessee is eying similar changes. Two bills, HR1627 and SB1610, are working their way through the Tennessee legislature. These bills aim to “exempt the sale of gold, silver, and platinum coins and bullion that are used as mediums of exchange from sales tax.”
The "Volunteer State" has similar independence minded residents.
States that have decided not to subject their citizens to this onerous tax are acknowledging an important distinction. Sales taxes are taxes on goods that will be consumed, often called consumption goods, or final goods. With this understanding, consider the fact monetary metals like gold and silver bullion coins, rounds, and bars are not consumed. They are nothing more than stored purchasing power which is unlocked the next time they are exchanged for something else of value. They are held for the purpose of investment or wealth preservation.
What did we say here, students? What do we say of the purpose of investment or of wealth preservation?
Louisiana Reverts Back to Pillaging Its People
Prior to 2013, Louisiana charged a sales tax on constitutional money. Representative Paul Hollis, a first term member of the Louisiana House of Representatives, led the charge to make the sale of precious metals exempt from sales taxes. Unfortunately, a so-called Republican representative named Jim Morris promoted a bill that reinstated the draconian sales tax on precious metals purchases and many other things. That will cost Louisiana jobs and drive investor money out of the state.
Note the take on this. Who is spinning what? Louisiana is strategically important to whose interests?
As more states reduce the costs and barriers to precious metals ownership, those who diversify some of their savings into hard money will continue to grow, and the concept of sound money will become more widely accepted.
Every day we are seeing the American people open their minds to the historic role that sound money has played. We’ve seen a few presidential candidates talk about it. A few state legislatures, too, have recognized the danger of being totally reliant on a monetary system based on debt and unbacked fiat money, and they’re taking concrete steps to liberalize the laws surrounding gold and silver ownership.
Emphasis mine: How well do you really fully understand a monetary system based on debt or of unbacked fiat money?
While there is a tremendous amount of work to do, we should be encouraged that the stranglehold central planners have over our money is beginning to loosen. People are taking notice that something about the debt-laden economy and their money isn’t right. And people are realizing that money backed by nothing isn’t actually money at all.
What, student, have we said about this?
The Sound Money Defense League is building a grassroots bonfire of opposition to federal and state policies that undermine the dollar and steal purchasing power from the American people. Please make your most generous gift today to support Sound Money.
So what is this? It's an offer to start some political action to get states to repeal sales taxes on precious metals sales. What would it accomplish? If we say, and we do, that we do not need any thing to back our money but ourselves, some out there faint for want of more economists' bait to pass along as some kind of authorized truth from acceptable and of course trustworthy sources. This is like one more of Gerald Celente's strong BS warnings: WE determine the terms of OUR own money. We do NOT base it on what THEY say THEIR gold and silver are worth in some other of THEIR money. We do not care. All we care to know is what THEIR money, all of it, including any commodity, might be worth in OURS. It's really just that simple.