{"id":65518,"date":"2017-02-08T11:08:19","date_gmt":"2017-02-08T15:08:19","guid":{"rendered":"https:\/\/stateofthenation2012.com\/?p=65518"},"modified":"2017-02-08T11:08:47","modified_gmt":"2017-02-08T15:08:47","slug":"arizona-committee-passes-bill-to-support-sound-money","status":"publish","type":"post","link":"https:\/\/stateofthenation2012.com\/?p=65518","title":{"rendered":"Arizona Committee Passes Bill To Support Sound Money"},"content":{"rendered":"

<\/a><\/p>\n

By Mike Maharrey
\nActivist Post<\/p>\n

An Arizona bill that would eliminate state capital gains taxes on gold and silver specie, and encourage its use as currency, passed an important House committee today. Final approval of the legislation would help undermine the Federal Reserve\u2019s monopoly on money.<\/p>\n

Rep. Mark Finchem (R-Tucson) introduced House Bill 2014 (HB2014<\/a>) on Jan. 9. The legislation would eliminate state capital gains taxes on income \u201cderived from the exchange of one kind of legal tender for another kind of legal tender.\u201d The bill defines legal tender as \u201ca 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.\u201d \u201cSpecie\u201d means coins having precious metal content.<\/p>\n

In effect, passage of the bill would \u201clegalize the Constitution\u201d by treating gold and silver specie as money.<\/p>\n

HB2014 passed the House Ways and Means Committee by a 5-0 vote, with four members abstaining.<\/p>\n

Under current Arizona law, gold and silver are subject to capital gains tax when exchanged for Federal Reserve notes, or when used in barter transactions. If the purchasing power of the Federal Reserve note has decreased due to inflation, the metals\u2019 nominal dollar value generally rises and that triggers a \u201cgain.\u201d In most cases, of course, the capital gain is purely fictional. But these \u201cgains\u201d are still taxed \u2014 thus unfairly punishing people using precious metals as money.<\/p>\n

A STEP FORWARD<\/h3>\n

Passage of HB2014 would allow Arizonans to deduct the amount of any net capital gain derived from the exchange of one kind of legal tender for another kind of legal tender or specie (gold and silver coins) from their gross income on their state income tax. In other words, 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.<\/p>\n

Passage into law\u00a0would mark an important step\u00a0towards currency competition. If sound money gains a foothold\u00a0in the marketplace against Federal Reserve notes, the people would be able to choose the time-tested stability of gold and silver over the central bank\u2019s rapidly-depreciating paper currency. The freedom of choice expanded by HB2014 would allow Arizona\u00a0residents to secure the purchasing power of their money.<\/p>\n

\u201cThis isn\u2019t going to end the fed\u2019s monetary monopoly overnight, but it sets the foundation and opens the door for more market activity by the people,\u201d Tenth Amendment Center executive director Michael Boldin said. \u201cThis is an important part of the overall strategy, and activists in Arizona should continue working to get both bills passed.\u201d<\/p>\n

BACKGROUND INFORMATION<\/h3>\n

Currently, all debts and taxes in Arizona must be paid with either Federal Reserve Notes (dollars), authorized as legal tender by Congress, or with coins issued by the U.S. Treasury \u2014 very few of which have gold or silver in them.<\/p>\n

But the United States Constitution states in Article I, Section 10, \u201cNo State shall\u2026make any Thing but gold and silver Coin a Tender in Payment of Debts.\u201d<\/p>\n

The Arizona bills\u00a0take a step towards that constitutional requirement, ignored for decades in every state. Such a tactic would undermine the monopoly or the Federal Reserve by introducing competition into the monetary system.<\/p>\n

Professor William Greene is an expert on constitutional tender and said when people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it would effectively nullify the Federal Reserve and end the federal government\u2019s monopoly on money.<\/p>\n

Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a \u201creverse Gresham\u2019s Law\u201d effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state\u2019s treasury, an influx of banking business from outside of the state \u2013 as people in other states carry out their desire to bank with sound money \u2013 and an eventual outcry against the use of Federal Reserve notes for any transactions.<\/p><\/blockquote>\n

Enter to Win 50 American Silver Eagles (Ad)<\/a><\/h4>\n

Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people. Nullifying the Fed on a state by state level is what will get us there.<\/p>\n

UP NEXT<\/h3>\n

HB2014 now moves to the House Rules Committee where it must pass by a majority vote before moving forward in the legislative process.<\/p>\n

___
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