A bill introduced in the US House would eliminate capital gains taxes on gold and silver bullion.
Rep. Alex Mooney (R-W.Va.) introduced HR6790 on Sept. 12. Titled the Monetary Metals Tax Neutrality Act of 2018, the legislation would amend the IRS code to exempt the sale of “refined gold or silver bullion, coins, bars, rounds, or ingots which are valued primarily based on their metal content and not their form,” from capital gains taxes.
It would also exempt any gold, silver, platinum, or palladium coins minted and issued by the US Treasury.
The bill would effectively be revenue neutral. While it would end capital gains taxes on gold and silver specie, investors would no longer be able to claim losses on their taxes either.
The IRS currently treats gold and silver bullion as “collectible” – think artwork or sports memorabilia. Any “gain” on the sale of gold and silver bullion is subject to capital gains taxes. Mooney said gold and silver are money and shouldn’t be taxed.
Mooney is right. Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another. But that’s essentially what taxes on gold and silver bullion do. By removing the taxes on the exchange of gold and silver, the US tax code would treat specie as money instead of a commodity.
Passage of HR6790 would take down a barrier to investing and gold and silver. 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. This could encourage and facilitate the use of gold and silver in everyday transactions.
Introduction of HR6790 is part of a wider movement many states including Arizona, Wyoming, North Carolina and Alabama have repealed taxes on gold and silver.
Ron Paul has supported this movement. He said sound money is key to shrinking the size and scope of government.
“If you want to have liberty and limit the size of government, you have to have honest money,” Paul said. Ron Paul pointed out that it’s really about the size and scope of