Sunday, May 26th, 2019

Why in the World Are Taxes Levied on Money Itself?

Published on August 30, 2016 by   ·   No Comments

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Jp Cortez

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 try walking to a local precious metals dealer in more than 25 states and exchanging 20 Federal Reserve notes for an ounce of silver. If you do that kind of money exchange, you will get hammered with a sales tax. That’s the price you can pay for bucking the system and picking up a piece of the only true money mentioned in the U.S. Constitution.

Of course, sales taxes haven’t been around forever.

Revenue hungry government officials in the 1930s brought us the first broad based, general sales taxes. Kentucky and Mississippi were the first adopters, and it spread rapidly from there.

Today, sales taxes are part and parcel of any shopping experience, in 45 states in the Union. Whether you buy a shirt or a hamburger, tax collectors want a piece of the action and force merchants to collect anywhere from 2.5% to 7.5%on top of your transaction total and forward it to the bureaucrats and politicians in your state capital.

Putting aside whether taxes on consumer goods is right or wrong, charging sales taxes on money itself is beyond the pale. In effect, those states that collect taxes on your purchases of precious metals are inherently saying gold and silver are not money at all.

It’s not difficult to see how these laws negatively affect those who choose to protect themselves from inflation and financial turmoil by saving some of their money in precious metals. Investors won’t want to pay, for example, $100 in taxes on purchase of a $1,350 one-ounce gold coin. It’s a competitive marketplace, so buyers will often purchase online or even travel out of state to obtain their precious metals.

Diversifying into precious metals tax free from an out-of-state national dealer such as Idaho-based Money Metals Exchange is a good option, because states are restricted in attempts to regulate interstate commerce. But state sales taxes reduce investors’ options and thereby have the negative effect of causing local dealers to lose business, threatening jobs and, even reducing those states’ overall tax revenues.

Read More HERE

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