(Kitco News) - In the US, legislation is being reshaped by a combination of state and federal efforts aiming to revise the taxation and legal tender status of gold and silver. This trend is catalyzed by a broader movement among lawmakers and fiscal conservatives who see these changes as essential to reinforcing economic stability. "Both the state of Nebraska and the state of Alabama passed legislation exempting capital gains from gold and silver on the state level. This is part of a movement. Other states have recently done the same thing," notes Jp Cortez, Executive Director of Sound Money Defense League. In response to these state-level initiatives, federal legislation is also being considered, with "Congressman Alex Mooney recently reintroduced legislation to end all federal income taxation on gold and silver, coins and bullion in the entire country.”
However, not all states have joined this movement. Hawaii, New Mexico, New Jersey, Vermont, and Maine still impose sales taxes on precious metals. These states are targets for future legislative efforts aimed at aligning them with the broader national trend.
The Constitutional Context and Implications for Sound Money
The U.S. Constitution grants Congress the power to coin money and regulate its value. Historically, this included precious metals like gold and silver, which were once part of the U.S. monetary system. Reintroducing gold and silver as money aligns with constitutional principles and acts as a countermeasure against inflation and government overspending. Cortez emphasizes the constitutional and economic stability sound money can bring in a recent interview with Jeremy Szafron, Anchor at Kitco News, "Sound money constrains a government that would otherwise do bad things with the power afforded to the printer of money... It provides people the chance to be able to save and plan in a currency that they know will hold value over the long term."
Sound money refers to money backed by a physical commodity such as gold or silver and is not susceptible to significant depreciation or inflation. It is characterized by its ability to hold value over time, offering predictability in financial planning and a check on the government's ability to inflate the currency supply.
The momentum for recognizing gold and silver as legal tender is growing across the U.S., highlighted by a Federal bill and recent legislative actions in several states. Nebraska joined the movement last month, becoming the 12th state to eliminate capital gains taxes on these precious metals, following Alabama's earlier decision.
Similarly, Arizona, Arkansas, and Utah have passed comparable laws in recent years. Efforts to exempt these metals from income taxes are also advancing in states like Iowa, Georgia, Oklahoma, Missouri, and Kansas, with significant legislative progress made in 2024. Additionally, Kentucky has recently become the 45th state to abolish sales taxes on gold and silver, further cementing the trend towards easing financial regulations on these assets.
Watch the full Kitco News interview above with JP Cortez to gain more insights into these significant developments in the monetary landscape.