Arizona just became the second state, after Utah, to remove state income tax from gold and silver coins.
Ron Paul, for one, is cheering:
Every supporter of free markets should cheer Arizona’s passage of HB 2014. There is no more justification for forcing individuals to use government created money than there is for forcing them to drive government manufactured cars. In fact, as the Federal Reserve’s 114 years of failure shows, giving monopoly control over our money supply to a secretive central bank is the most dangerous form of government intervention…
By taxing any increase in the value of gold coins as capital gains, tax laws make it difficult to use gold as an alternative to fiat-backed currencies. The bill’s sponsor, Republican Mark Finchem, argued that taxing legal tender gold coins was akin to taxing money.
Ron Paul is bullish on the positive benefits:
By allowing the people of Arizona to use an alternative to Federal Reserve-created fiat currency, HB 2014 will help the people of Arizona survive the next Federal Reserve-created recessions. Passage of this bill will also help make Arizona more attractive to the growing number of people seeking alternatives to fiat money in order to protect themselves, their families, and their business from the effects of Federal Reserve policy. Thus, this bill will help attract new investments and jobs to Arizona…
This is far outside any expertise of mine. But George Gilder has argued that the government’s monopoly on money is a problem. This is at the very least an underreported story of an interesting new trend in the states.
Unless the federal government follows suit, however, it seems likely the federal income and capital gains tax will negate the purposes of Arizona’s demonstration project.
Photo credit: Gage Skidmore