Congressmen Introduce Bill to End Taxation of Gold and Silver Reply

By J P Cortez

Washington, DC (September 7, 2018) – The battle to end taxation of constitutional money has reached the federal level as U.S. Representative Alex Mooney (R-WV) today introduced sound money legislation to remove all federal income taxation from gold and silver coins and bullion.

The Monetary Metals Tax Neutrality Act – backed by the Sound Money Defense League, Money Metals Exchange, and free-market activists – would clarify that the sale or exchange of precious metals bullion and coins are not to be included in capital gains, losses, or any other type of federal income calculation.My view, which is backed up by language in the U.S. Constitution, is that gold and silver coins are money and…are legal tender,” Mooney said in a House Financial Services Committee hearing this week. “If they’re indeed U.S. money, it seems there should be no taxes on them at all. So, why are we taxing these coins as collectables?”

Acting unilaterally, the Internal Revenue Service has placed gold and silver in the same “collectibles” category as artwork, Beanie Babies, and baseball cards, a classification that subjects the monetary metals to a discriminatorily high long-term capital gains tax rate of 28%.

Sound money activists have long pointed out it is inappropriate to apply any federal income tax, regardless of the rate, against the only kind of money named in the U.S. Constitution.  And the IRS has never defended how its position squares up with current law.

Furthermore, the U.S. Mint continuously mints coins of gold, silver, platinum, and palladium and gives each of these coins a legal tender value denominated in U.S. dollars.  This formal status as U.S. money further underscores the inappropriate nature of IRS income tax treatment.

A tax neutral measure, the Monetary Metals Tax Neutrality Act states that “no gain or loss shall be recognized on the sale or exchange of (1) gold, silver, platinum, or palladium coins minted and issued by the Secretary at any time or (2), refined gold or silver bullion, coins, bars, rounds, or ingots which are valued primarily based on their metal content and not their form.”

Under current IRS policy, a taxpayer who sells his precious metals may end up with a capital “gain” in terms of Federal Reserve Notes and must pay federal income taxes on this “gain.”

But the capital “gain” is not necessarily a real gain. It is often a nominal gain that simply results from the inflation created by the Federal Reserve and the attendant decline in the Federal Reserve Note dollar’s purchasing power.

Under Rep. Mooney’s bill (which has already been cosponsored by two others), precious metals gains and losses would not be included in any calculations of a taxpayer’s federal taxable income.

“Inflation is a regressive tax that especially harms wage earners, savers, and retirees on a fixed income,” said Jp Cortez, policy director at the Sound Money Defense League. “We are encouraged that an increasing number of citizens, state legislators, and members of congress are taking action to address the evils of the Federal Reserve System.”

“The IRS does not let taxpayers deduct the staggering capital losses they suffer when holding Federal Reserve Notes over time,” said Stefan Gleason, president of a Money Metals Exchange, a precious metals dealer recently named “Best in the USA” by a global industry ratings group.

“So it’s grossly unfair for the IRS to assess a capital gains tax when citizens hold gold and silver to protect them from the Fed’s policy of currency devaluation.”

Rep. French Hill (R-AR) and Rep. Raul Labrador (R-ID) joined today as original cosponsors.  The text of the bill can be found here.

The Sound Money Defense League is a public policy group working nationally to bring back gold and silver as America’s constitutional money.  

Money, Fake Money, and Sound Money Reply

By Jp Cortez, Sound Money Defense League

Americans no longer carry gold and silver money in our pockets and purses as our grandparents did. But we still carry the history, legacy, and spirit of those gold and silver coins in our language.

“Sound money” embodies a clear message recognized for centuries around the world. It describes the musical, metallic ring of a gold, silver, or copper coin dropped on any hard surface of glass, stone, wood, or metal.

Sound money literally refers to real wealth, with a natural, unmistakable signature of authenticity, as opposed to the paper, plastic, and electronic debt instruments used almost exclusively today.

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Member of House Monetary Policy Committee Questions U.S. Treasury and Fed on Gold Activities Reply

Washington, DC (April 25th, 2018) – A U.S. Representative posed several pointed questions to the Federal Reserve and the U.S. Treasury this week as to their activities involving America’s gold, including, apparently, efforts to “drive gold out of the world financial systems in favor of the Federal Reserve Note or Special Drawing Rights issued by the International Monetary Fund.”

In a letter dated April 24, Representative Alex Mooney (R-WV) wrote to Jerome Powell, Chairman of the Federal Reserve, and Steven Mnuchin, Secretary of the U.S. Treasury, raising concerns about their policy to devalue the Federal Reserve Note, via “inflation targeting,” and requesting information about the United States’ use of, and position on, gold.

“The purchasing power of our currency has fallen some 97% since Congress passed the Federal Reserve Act in 1913, with an acceleration in the rate of decline occurring since the early 1970s when the final link to gold was severed,” wrote Mooney.

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Senator Ted Cruz’s Bill to Remove the Inflation Tax from Capital Gains Addresses a Symptom but Not the Cause Reply

Washington, DC (April 13, 2018) – U.S. Senator Ted Cruz (R-Texas) has just announced he will introduce a bill to end taxes on capital “gains” that are simply a result of inflation.

Cruz’s inflation-indexing bill seeks to “expand economic growth and encourage more investment into the economy, helping create more opportunities for hardworking Americans.”

“If you invest a thousand dollars, and then ten years later you sell whatever you have invested in for two thousand dollars, right now, you are taxed on that full gain, ignoring inflation, and ignoring the fact that inflation has eaten away a big chunk of that gain,” Sen. Cruz said.

The Sound Money Defense League lauded the measure for acknowledging the problem created by the official policy of devaluing the purchasing power of the Federal Reserve Note “dollar” and for taking a reasonable first step to addressing it.

“Because of inflation, much of what is taxed as capital gains is not a real gain, but rather a nominal gain created by the Federal Reserve System through its policy of serial devaluation,” said Jp Cortez, Policy Director at the Sound Money Defense League.

“We praise Senator Cruz for advancing a bill that addresses a symptom of Federal Reserve currency debasement,” continued Cortez. “However, the fundamental solution is a return to sound money in America, i.e. gold and silver, as intended by our nation’s Founding Fathers.

“Until we strip central bankers of their abusive power to create money out of thin air, our nation’s investors, savers, pensioners, and wage-earners will be robbed of their assets through the insidious inflation tax.”

The Sound Money Defense League is an Idaho-based public policy group working nationally to bring back gold and silver as America’s constitutional money. Visit Soundmoneydefense.org for more information.

Congressman Criticizes U.S. Mint for “Disappointing and Concerning” Inaction on Counterfeit Precious Metals Coins 1

By J P Cortez

U.S. Secret Service Also Frustrated with U.S. Mint’s “Lack of Supporting Action”

Washington, DC (March 12, 2018) – Congressmen Alex Mooney (R-WV) criticized the United States Mint for its “disappointing and concerning” lack of awareness or action on the growing problem of high-quality counterfeits of U.S. precious-metals coins entering the country from China and elsewhere.

In a letter dated March 6, Rep. Mooney took the U.S. Mint to task on its perfunctory one-page response to a prior letter that he and Congressman Frank Lucas sent last October asking for information as to whether, and to what extent, the U.S. Mint has taken proactive steps to protect the integrity of America’s minted coins, including reviewing and implementing the anti-counterfeiting measures already put in place by certain foreign government and private mints.

“The U.S. Mint’s response dated November 17, 2017, seemed to suggest a belief that the problem was not significant,” wrote Mooney in his March 6 letter.

“However, the U.S. Secret Service has since briefed my office about the extent of this activity and its frustration with a lack of supportive actions by other agencies, including the U.S. Mint.”

“The matter of counterfeits has been repeatedly raised as a serious issue in the coin industry press… As your team is aware, there have been anti-counterfeiting technologies on the market for some time – and many of these technologies have already been adopted by some of your ‘competitors,’” continued Rep. Mooney.

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Wyoming Legislature Passes Bill to End All Taxation of Gold & Silver Reply

By J P Cortez

Cheyenne, Wyoming (March 7, 2018) – Following a 44-14 vote in the Wyoming House last week, the Wyoming State Senate today overwhelmingly approved a bill which helps restore constitutional, sound money in Wyoming.

Wyoming Senators voted 25-5 to pass the Wyoming Legal Tender Act (House Bill 103), sending the measure introduced by Representative Roy Edwards (R-Gillette) to Governor Matt Mead’s desk. Sound money activists are already contacting Gov. Mead urging that he sign the bill.

Backed by the  Sound Money Defense League, Campaign for Liberty, and  Money Metals Exchange, HB 103 is a bill that removes all state taxation from  gold and silver bullionand reaffirms their legal tender status in Wyoming, in keeping with Article 1, Section 10 of the U.S. Constitution.

Testifying before the Senate Minerals, Business, and Economic Development Committee, Sound Money Defense League Policy Director Jp Cortez made the case to Wyoming legislators that assessing taxes on purchases of gold and silver is unjust and undermines their constitutional status as money.

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More U.S. States Are Knocking Down Gold & Silver Barriers Reply

By J.P. Cortez

Listen to the Podcast Audio: Click Here

Here’s What Arizona, Texas, North Carolina, Virginia, Idaho, Etc. Are Doing…

In 2017, Arizona, Louisiana, Virginia, Texas, and North Carolina, and even Minnesota made progress on the sound money front. In 2018, other states could do so as well.

36 states have already removed sales taxes from precious metals transactions, and bills being introduced this year by sound money advocates in Alabama and Tennessee could add to that list.

Both Utah and Oklahoma have already passed legal tender laws recognizing gold and silver as money. The monetary metals can be used freely as a means of payment.

Meanwhile, a new Wyoming bill next month would repeal both sales and income taxes on bullion while affirming gold and silver as legal tender and strengthening gold clause contracts.

Other states, including Arizona and Idaho, have moved forward on legislation to exempt gold and silver bullion from capital gains taxes.

Last year, a bill to eliminate capital gains taxes on precious metals passed the Idaho House. Money Metals Exchange President Stefan Gleason testified before the House Committee on Revenue and Taxation, and here is some of what he had to say:

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Congressmen Press the U.S Mint for Action on Counterfeit Gold and Silver Coins Reply

By J P Cortez

Washington, DC (October 27, 2017) — Congressmen Alex Mooney (R-WV) and Frank Lucas (R-OK) today delivered a formal letter to the United States Mint and Secret Service, urging aggressive action on the growing problem of high-quality counterfeits of U.S. precious metals coins entering the country from China and elsewhere.

“Enclosed herewith is a 1995 1 oz. Gold American Eagle coin, carrying a face value $50 and ostensibly minted by the U.S. Mint,” Mooney and Lucas wrote.  “You are free to keep it, as it’s a worthless tungsten fake.”

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Arizona Ends Income Taxation on Gold & Silver Coins Reply

Arizona Governor Doug Ducey Greenlights House Bill 2014, Removing Income Tax from Certain Precious Metals at the State Level

 Phoenix, Arizona (May 23rd, 2017) – Sound money advocates rejoiced today as House Bill 2014 became the law in Arizona. HB 2014, which passed in the Arizona state Senate on May 10th by a margin of 16-13, removes all income taxation of precious metals coins at the state level.

Under House Bill 2014, introduced by Representative Mark Finchem (R-Tucson), Arizona taxpayers will simply back out all “gains” and “losses” on any precious metals that are in legal tender form and reported on their federal tax returns from the calculation of their Arizona adjusted gross income (AGI).

If taxpayers own gold or silver to protect themselves against the devaluation of America’s paper currency, thanks to the inflationary practices of the Federal Reserve, they frequently end up with a “gain” when exchanging those metals back into dollars. However, this is not necessarily a real gain in terms of a gain in actual purchasing power. This “gain” is often a nominal gain because of the slow but steady devaluation of the dollar.  Yet the government nevertheless assesses a tax.

Sound Money Defense League, former presidential candidate Congressman Ron Paul, and Campaign for Liberty helped secure passage of HB 2014 because it begins to dismantle the Federal Reserve’s monopoly on money.

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Time to Hedge State Reserve Funds with Gold Reply

By Jp Cortez

Financially prudent individuals set aside surplus funds to protect against unforeseen expenditures. This way, when faced with loss of income, house repairs, car trouble, or anything else, they will have a buffer against unanticipated downturns.

In the same vein, almost every state in the United States has established a “savings account” for government operations. Primarily to mitigate a decline in tax revenues that comes alongside economic slumps, states have created so-called budget stabilization funds – colloquially known as “rainy day funds.”

Every state takes a different approach to budget stabilization funds, from the mechanisms by which they are funded, to the caps placed on balances, to the manner in which the funds can be allocated. If a state can put funds aside during years of increased revenue and growth, said state will be better equipped to handle a decrease in tax revenue, an environmental incident, or some other surprise.

But simply plowing rainy day funds into Federal Reserve Notes (commonly referred to as “dollars”) or other paper instruments is taking an entirely new gamble – inflation.

It is unwise to store large amounts of cash for extended periods of time because of constant and intentional devaluation of the Federal Reserve Note. This tax on savings is known as inflation. It works on both the micro and the macro level. For the same reason an individual would be remiss to hold his or her entire life savings in cash for the duration of his or her entire life, a state would be remiss to hold large amounts of cash for extended periods of time.

One Tennessee lawmaker named Representative Bud Hulsey (R-Kingsport) understands the risk involved in long term storage of Federal Reserve Notes, and he has proposed to do something about it by introducing House Bill 0777. House Bill 0777 is a measure that calls for the treasurer to invest at least 40% of the reserve for revenue fluctuations in gold bullion or other precious metals bullion.

The Tennessee Department of Treasury’s stated mission is “to enrich the lives of Tennesseans as a national leader in public financial stewardship.” To hold only Federal Reserve Note instruments as financial insurance, particularly over long term periods of time, is both irresponsible and inherently at odds with Tennessee’s mission statement.

Unfortunately, most state governments, pension funds, and individual investors remain vulnerable to inflation risk.

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Make Money Great Again: Vote for Gold Reply

By Guy Christopher, Originally Published on Money Metals Exchange

Who could possibly have predicted the astounding results of the November 8th presidential election?

A lot of folks, it turns out. Better than 60 million at last count. But that doesn’t include highly paid, and obviously over-paid, pollsters.

And it doesn’t include “journalists,” who showered their elitist agendas on television screens, in newsprint headlines and across cyberspace during the 17-month presidential campaign.

In short, those posing as experts predicting the future blew it. And they blew it “big league,” both before and after the election.

“No question – markets are going to tank all over the world,” said top experts at Yahoo Finance, during online, streaming coverage election night.

Stock markets instead went straight up for two days before modestly retreating.

Yahoo was not alone with that post-election financial advice. True to form, every business reporter in town got it dead wrong.

Curiously, not one dared repeat Trump’s constant drumbeat to his supporters – “stay out of this dangerous stock market!”

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Diwali, Lord Rama, and the Return of Gold from Exile Reply

By J P Cortez

October 30, 2016 marks an important holiday in the Indian culture. Diwali begins.

Diwali is one of the biggest festivals for Hindus, Sikhs, and Jains. It is a lavish celebration of the victory of light over darkness.

Diwali celebrations entail gleaming candles, luxurious works of art, opulent feasts, and the observance of good over evil. Diwali is also characterized by gift giving. Buying and gifting gold is considered auspicious during Diwali.

Given the nature of the holiday and the number of people who celebrate it, according to CNBC, the past few years have seen a tendency for the price of gold to rise around Diwali. Mihir Kapadia, founder & CEO of Sun Global Investments, said, “As heavy consumers, the festive seasons always tend to surge the demand, and considering the current low prices, this should increase the market activity and thus push the prices a little.” Kapadia continued, “We do not expect it to boost prices significantly as the overall market is subdued due to the worries about rising interest rates.”

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$135,000 Gold-Backed Scholarship Fund Launched to Help Students Cope with Federal Reserve Induced Tuition Inflation Reply

By J. P. Cortez

A major national precious metals dealer announced today the creation of the first gold-backed scholarship fund to support outstanding students who understand that gold is money and can articulate the failures of the inflation-creating Federal Reserve System.

Money Metals Exchange, a national precious metals dealer recently ranked “Best in the USA,” teamed up with the Sound Money Defense League, setting aside 100 oz of physical gold, currently worth $135,000, to help outstanding students pay for ever-rising education costs.

“The Federal Reserve’s inflationary policies have jacked up education costs, and our company is proud to help students who understand this problem as they cope with this unfolding disaster,” said Stefan Gleason, president of Money Metals Exchange. “Because of abusive and ongoing devaluation of the Federal Reserve Note, we expect the gold that we have set aside to fund the scholarship program will grow in nominal value dramatically over time.”

This scholarship will be open to high school seniors, undergraduate students, and graduate students with an interest in economics, specifically the tradition of the Austrian school. However, one does not have to be an economics major to apply.

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