Is the U.S. Government Moving Towards a Gold Standard in 2024?
- Mark Lafond, RA
- Feb 18, 2024
- 5 min read
Updated: Mar 16, 2024
U.S. State Legislatures Champion Gold and Silver Constitutional Money
In the heart of America's heartland, Kentucky lawmakers are spearheading a transformative initiative to overhaul the state's financial infrastructure. Representative Steven Doan and Senator John Schickel have unveiled a groundbreaking legislative proposal:
Kentucky House Bill 101 and Senate Bill 105. These bills seek to fundamentally alter the taxation landscape by exempting gold, silver, platinum, and palladium bars, ingots, rounds, and coins from state sales taxes. With 9 cosponsors combined and widespread grassroots support resonating across the Commonwealth, these measures symbolize a concerted effort to stimulate economic growth and fortify investor confidence within Kentucky's borders.
The impetus behind this legislative endeavor stems from a broader national trend aimed at liberating precious metals from the shackles of taxation. While Kentucky deliberates, neighboring states such as New Jersey have already embraced this progressive stance, unanimously passing legislation to abolish sales taxes on gold and silver purchases. As New Jersey prepares to join the ranks of 43 other states that have discarded this antiquated taxation practice, the momentum behind this movement underscores the growing recognition of precious metals as vital components of a robust and resilient financial system.
Delving deeper into the rationale behind House Bill 101 and Senate Bill 105 reveals a multifaceted approach to economic revitalization and fiscal reform. At its core, the proposal challenges the conventional wisdom of taxing precious metals, which are primarily held as long-term investments rather than consumable goods. By exempting these assets from sales taxes, Kentucky lawmakers aim to foster a more conducive environment for precious metals investment, attracting capital inflows and bolstering the state's economic competitiveness.
Moreover, empirical evidence suggests that taxing precious metals is not only economically inefficient but also counterproductive in the long run. Studies have shown that any marginal gains in tax revenue derived from taxing precious metals may be outweighed by the broader economic consequences, including diminished business activity and capital flight. By eliminating this impediment to investment, Kentucky can position itself as a magnet for precious metals enthusiasts and entrepreneurs seeking to capitalize on the burgeoning demand for alternative assets.
Constitutional principles further buttress the case for exempting precious metals from sales taxes. As the only forms of money explicitly mentioned in the U.S. Constitution, gold and silver enjoy a unique legal status that transcends mere commodity status. By upholding these constitutional mandates, Kentucky not only reaffirms its commitment to the principles of fiscal responsibility and economic freedom but also safeguards the financial interests of its residents against the erosive effects of inflation and currency debasement.
The national trend towards embracing constitutional money underscores a broader paradigm shift in monetary policy and financial governance. States across the country are increasingly recognizing the intrinsic value of gold and silver as reliable stores of wealth and are taking proactive steps to integrate these assets into their monetary frameworks. By championing pro-metal legislation, Kentucky can position itself at the forefront of this movement, setting a precedent for other states to follow suit and embrace sound monetary policies rooted in constitutional principles.
In practical terms, the ramifications of House Bill 101 and Senate Bill 105 extend far beyond the realm of taxation reform. By fostering a favorable environment for precious metals investment, Kentucky stands to reap significant economic dividends, including job creation, capital formation, and increased tax revenue from ancillary industries.
Furthermore, the passage of these bills would enhance Kentucky's standing in the 2023 Sound Money Index, signaling to investors and businesses alike that the Commonwealth is committed to fostering a stable and resilient financial ecosystem.
Looking ahead, the success of House Bill 101 and Senate Bill 105 hinges on broad-based support from stakeholders across the political spectrum. By rallying behind these measures, Kentuckians can send a powerful message to policymakers and elected officials that they demand substantive reforms to the state's taxation regime. As other states join the chorus of voices advocating for precious metals tax reform, Kentucky has the opportunity to emerge as a trailblazer in the fight for economic liberty and financial sovereignty.
The introduction of House Bill 101 and Senate Bill 105 represents a watershed moment in Kentucky's economic history. By embracing the timeless virtues of gold and silver and rejecting the outdated practice of taxing precious metals, Kentucky has the chance to chart a new course towards prosperity and financial freedom. As the Commonwealth embarks on this transformative journey, the eyes of the nation are upon it, eagerly awaiting the outcome of this bold experiment in fiscal reform and economic revitalization.
The United States Constitution:
"No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility."
Shiff Gold reports this move reflects a broader trend where states are increasingly seeking alternatives to Federal Reserve money in favor of gold and silver.
The introduction or reintroduction of bills aimed at exempting precious metals from state sales tax or state income tax underscores states' desire to promote constitutional money. Here are some reasons why states are inclined towards constitutional money over Federal Reserve currency:
1. Monetary Independence: States recognize the importance of having control over their monetary policy. By embracing gold and silver as constitutional money, states can reduce their reliance on the Federal Reserve and assert greater autonomy in managing their economies.
2. Inflation Protection: Gold and silver have historically served as reliable stores of value, protecting against the erosive effects of inflation. In contrast, Federal Reserve money is susceptible to inflationary pressures stemming from excessive money printing and government spending.
3. Preservation of Wealth: In times of economic uncertainty or currency devaluation, individuals and governments alike turn to precious metals as a safe haven asset. States view the adoption of constitutional money as a means to preserve the wealth of their citizens and safeguard against economic instability.
4. Constitutional Mandate: Some states view the use of gold and silver as consistent with the principles outlined in the U.S. Constitution. Article I, Section 10 of the Constitution prohibits states from emitting bills of credit or making anything but gold and silver coin a tender in payment of debts. By aligning with constitutional provisions, states aim to uphold the integrity of the nation's founding document.
5. Historical Precedent: Prior to the establishment of the Federal Reserve system in 1913, gold and silver played a central role in the U.S. monetary system. States that advocate for constitutional money often cite this historical precedent and seek to revive the traditional monetary standards that prevailed before the era of fiat currency.
By championing pro-metal bills and offering tax relief on precious metals, states are signaling their commitment to promoting sound monetary practices and safeguarding the financial well-being of their constituents. As these bills progress through legislative channels, they represent significant strides towards establishing a monetary framework that aligns with constitutional principles and prioritizes the stability and prosperity of state economies.
_______________________________________________________________________________
