A bill being considered by the Arizona legislature could be the park of a sound money revolution. Much like the marijuana legalization movement ignited by anti-drug war advocates across the states, this new movement could help strike the root of all of our economic woes.
According to the Tenth Amendment Center, House Bill 2014 would initiate the sound money revolution by eliminating state capital gains taxes on gold and silver specie. Thus encouraging individuals to use the metals as currency. The bill, which passed the House on the 13th, will need a final approval from the Senate. And if approved, the legislation would then initiate a movement that could help put an end to the Federal Reserve’s monopoly on money.
By removing the burden of applying state capital gains taxes on income “derived from the exchange of one kind of legal tender for another kind of legal tender” and redefining legal tender as ““a medium of exchange, including specie, that is authorized by the United States Constitution or Congress for the payment of debts, public charges, taxes and dues,” coins having precious metal content could become, once again, a legal form of currency.
By passing this bill, the Arizona legislature would be allowing silver and gold specie to be treated as money, essentially “legalizing the constitution.”
Currently, Arizona law requires individuals to pay capital gains taxes whenever they use gold and silver in transactions or any time they want to exchange the metal for Federal Reserve notes. Due to inflation, the purchasing power of fiat money decreases, which then causes the metal’s nominal value to rise. Thus the “gain” taxes. Even if they are fictional. The result is obviously unfair because it penalizes those using gold and silver as money.
By passing HB 2014, Arizonans would not have to add the amount of any net capital gain tied to the exchange of different kinds of legal tender, freeing the consumer from being subject to state taxes.
This could open up currency competition in Arizona, causing other states to perhaps do the same once they realize competition will help to bring the government monopoly over the currency down.
To advocates of states’ rights like Tenth Amendment founder Michael Boldin, this piece of legislation in Arizona is a great first step to “end the fed’s monetary monopoly,” even if it won’t put an end to it overnight. By giving the individual Arizona resident his freedom to trade freely, he will be securing the purchasing power of his money as a result.