Sound Money Measures to Advance in 2022

21 Jan

Sound Money Measures to Advance in 2022

More states are expected to recognize Constitutional money as, well, Constitutional money in 2022.

That is according to the Sound Money Defense League, an organization that tracks state-level sound money – gold and silver — legislation across the United States. 2021 was a good year for advancing the interests of gold and silver, says the League; 2022 could be even better.

Imagine the absurdity of the following situation.  You ask the bank to give you five twenty-dollar bills in exchange for a one-hundred-dollar bill.  The teller does so, but only after deducting sales tax, for example, 8.6 percent which is the prevailing sales tax rate in Phoenix, Arizona.  

In that case, the bank would take your $100 bill and give you $91.40.

As we have discussed often, money cannot function in such an environment.  Without getting too technical a functional currency cannot have a bid-ask spread.  And whether tax-hungry officials like it or not, the US Constitution provides for gold and silver to serve as money.

There is no sales tax on precious metal coins and bullion in Arizona.  The formal language of this exemption is found in Arizona Revised Statutes 42-5061.

Issuers of fiat currencies are always hostile to gold and must suppress it at the first hint of a challenge.  After all, the money printing flim-flam works by the State appropriating some of the value of the currency.  If people are wise to the game and refuse to hold the State’s currency, there is no one to fleece.  

That is why tax policy is hostile to gold and silver.  They represent superior competitors to dollars that roll right off the digital printing press by the trillions with nothing more than a computer keystroke.  

As we are becoming fond of saying, they cannot print gold and silver!  

In any case, more states are lining up to remove sales taxes on gold and silver, while other states are taking steps to eliminate capital gains taxes.

According to the Sound Money Defense League:

More than a half dozen states are now considering legislation that rolls back discriminatory taxes and regulations on the sale, use, and purchase of gold and silver.

To date, 42 states have removed some or all taxes from the purchase of gold and silver. And there are new bills pending now in five of the eight remaining states, i.e., Tennessee, Mississippi, Kentucky, Hawaii, and New Jersey.

The problem of unsound money cannot be entirely eliminated by the legislative action of individual states. 

The League concludes that: 

The root of the problem is the Federal Reserve, U.S. Treasury, and Congress who have fully embraced fiat money and abandoned monetary restraint.

With the Consumer Price Index running at its highest rate in 40 years, inflation is becoming the most pressing economic issue of our time.

While federal policymakers are exacerbating the problem, some states are thankfully stepping up to give their citizens some tools to protect themselves.