Gold and Silver Shouldn’t Be Taxed as Legal Tender, Say Increasing Numbers of Americans

Gold and Silver Set to Resume Upward Trend This Week
Published on: May 13, 2024

On May 8th, U.S. Representative Alex Mooney (R-WV) reintroduced The Monetary Metals Tax Neutrality Act (H.R. 8279),” a “sound money bill” aimed at eliminating federal income tax on gold and silver coins and bullion. According to Mooney, the basis for this is the assertion that, as per the U.S. Constitution, gold and silver coins are money and legal tender.

Reps. Scott Perry (R-PA) and Randy Weber (R-TX) are also co-sponsors of this bill. Additionally, the Sound Money Defense League (SMDL), Money Metals Exchange, and free-market activists also support this initiative.

If passed and enacted, this bill would designate gold and silver as non-taxable entities, placing them on par with the U.S. dollar. Profits or losses from the sale or exchange of gold and silver bars and coins would not be included in the scope of income tax. However, under current tax laws, the Internal Revenue Service (IRS) categorizes gold and silver as “collectibles,” subjecting them to the same high long-term capital gains tax rate of up to 28% as art, Beanie Babies, and baseball cards.

Considering gold and silver as collectibles is deemed extremely unfair and discriminatory if they are to be treated as legal tender. Moreover, capital gains on precious metals do not typically represent real value appreciation but rather nominal appreciation driven by inflation caused by the Federal Reserve and the declining purchasing power of the U.S. dollar.

Inflation in the U.S. is eroding the purchasing power of American consumers, leading them to increasingly turn to gold and silver as a means to safeguard their wealth and achieve value preservation. The inflation in the U.S. is not caused by CEOs of supermarkets or leaders of other countries but is a result of the Federal Reserve and federal policy. Therefore, individuals have the right to seek alternatives to the U.S. dollar to protect their savings, and the federal government has a responsibility to abolish discriminatory policies against gold and silver.

Confidence in the U.S. dollar is gradually waning globally, as central banks worldwide continue to increase their holdings of gold. Internally, confidence in the U.S. dollar is also diminishing, exemplified by an increasing number of states recognizing gold and silver as legal tender. Currently, 31 states in the U.S. have officially declared currency independence and acknowledge gold as money.

Last month, Nebraska became the 12th state to eliminate capital gains tax on the sale of gold and silver through a legislative act. Earlier this year, Alabama also abolished capital gains tax on gold and silver. Looking back over the past few years, similar acts have been approved by Arizona, Arkansas, and Utah. Looking ahead to 2024, Iowa, Georgia, Oklahoma, Missouri, and Kansas are considering income tax exemption policies.

Simultaneously, last month, Kentucky ceased the sales tax on gold and silver, becoming the 45th state in the U.S. to not impose sales tax on gold and silver.

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