“It makes no sense to tax money.”

Dr. Ron Paul summed it up perfectly during a recent Arizona Senate committee hearing on a bill that would eliminate state capital gains taxes on gold and silver specie, and encourage its use as currency.

House Bill 2014 (HB2014) passed the Senate Finance Committee by a 4-3 vote along party lines after the eventful hearing. It’s one of several bills moving across the country to encourage sound money and make it easier for people to protect themselves against the disastrous effects of the Federal Reserve.

Passage of HB2014 would remove the amount of any net capital gain derived from the exchange of one kind of legal tender for another kind of legal tender or specie (gold and silver coins) from their gross income on their state income tax. In other words, individuals buying gold or silver bullion, or utilizing gold and silver in a transaction, would no longer be subject to state taxes on the exchange.

Senator Steve Farley (D-Tucson) voiced his opposition to the legislation, saying that passage of this bill would be “picking winners and losers,” in that some people (precious metals holders) would get a “tax break,” while others (stock and bond holders) would not receive the same advantage.

Dr. Paul explained that unlike stocks and bonds, gold and silver are money. There is no justification for taxing the exchange of one form of money for another.

“We ought not to tax money – and that’s a good idea. It makes no sense to tax money,” he said.

Jp Cortez serves as assistant director of the Sound Money Defense League. The organization has been heavily involved in pushing HB2014 forward. Cortez says he was pleased with the result of the committee vote, but the narrow margin shows there is still much work to be done.

“These are exciting times in Arizona. It was great to see Dr. Paul speaking on the importance of sound money. Mark [Finchem] has been working tirelessly on HB2014. There’s still more work to be done though,”  said, “Senator Farnsworth has his hands full in the Senate, and we need to make sure we’re doing everything we can: calling senators, writing letters, attending hearings. Everything helps. And getting this important bill across the finish line is a great step for sound money everywhere.”

The Arizona proposal is virtually identical to a bill in the Idaho House that passed committee last week and awaits a floor vote. Sound Money Defense League director Stefan Gleason testified in favor of that bill.

Bills to eliminate sales tax on gold and silver are under consideration in Kentucky, Tennessee, Alabama and Maine.

“Ron Paul was right: the issue of sound money is an important issue,” Cortez said. The Mises Institute published a great piece the other day about how sound money is gaining a foothold all across the country. What we’re seeing in Idaho, Arizona, Tennessee, Maine, and so many other states is a collective understanding that the lack of sound money is a real issue. Fortunately, we’re seeing that manifest itself in fiscally responsible citizens urging their legislators to do something about it. It’s sprouting up everywhere and it’s all part of a broad effort to return to a currency based in reality.”



Mike Maharrey

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