Idaho Officially Revokes Income Tax on Gold and Silver

May 02, 2018

Idaho Officially Revokes Income Tax on Gold and Silver

Most countries, including the United States, have no tax on the sale of precious metals. The justification for this has been simple: gold and other precious metals are an investment vehicle. Since there is no tax on the purchase and sale of financial investments, it is clear how this works.

Recently, another - older - way of looking at precious metals has come up. Rather than an investment vehicle, many argue that precious metals - specifically, gold and silver - are in fact money.

 In fact, gold was so revered as a currency that when the Bland-Allison Act was passed, in 1878, to put silver into circualtion, President Rutherford B Hayes vetoed it. Congress disagreed, however, and overode that veto, enacting silver as money in the United States.

Are gold and silver money?

If gold and silver are indeed money, many people argue it is entierly nonsensical and unethical to charge a capital-gains tax on it's conversion to another form of money, i.e. fiat currency.

Consider an analogy - a forgein exchange trade - whereby you profit in the following case. You went travelling and conveted an "emergency fund" of 100 dollars to 150 euros. You then return home with 150 euros, and convert that into 110 dollars. Is this income? Clearly only with a very strong stretch. With that in mind, if you were doing this on a regular basis, that would be an entierly different story.

Recently, Bill 206, proposed by Idaho House Mjaority Leader Mike Moyle was approved. That Bill saw to it that the "capital gains and losses on precious metals bullion and monetized bullion sales" be stuck from the taxable income provisions.

The real challenge, however, was illustrated by Rep. Ron Nate, who noted "If we are not going to allow people to declare capital losses on their Federal Reserve Notes or their dollar holdings, it would also be unfair to tax people for their gold and silver holdings."

This is an absolute boon to precious metals owners everywhere. Trends recognizing gold for what it is - a currency - illustrate the obvious fact that people don't buy gold for the same reason they buy stocks or bonds.

You should pay close attention to Arizona over the next few weeks, as it might be enacting similar measures.



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