Representative Stewart Jones (R-Laurens) has prefiled three sound money measures in South Carolina. These three measures were introduced last session and are expected to receive a hearing this year.
House Bill 3378 would exempt gold, silver, and platinum bullion from South Carolina capital gains taxes. In recent years, legislation to remove capital gains taxes currently assessed on the sale of the monetary metals progressed through several state legislatures – Wyoming, Utah, and Arizona were the last three states to remove income taxes from constitutional money. In recent years, the Idaho legislature has heard, and the Idaho House has overwhelmingly passed, legislation to remove income taxes currently assessed on the monetary metals.
Here are a few reasons why slapping an income tax on the monetary metals is wrong:
- Current South Carolina law assesses taxes on imaginary gains. Under current law, a taxpayer who sells precious metals may end up with a capital “gain” in terms of Federal Reserve Notes. This capital “gain” is not necessarily a real gain, it’s often a nominal gain that results from the inflation created by the Federal Reserve and the attendant decline in the dollar’s purchasing power.
Yet this nominal gain is taxed at the federal level – and, because Idaho uses federal adjusted gross income (AGI) as a starting point for Idaho income calculations, this nominal gain is taxed again by South Carolina.
- Inflation harms the poorest among us. Inflation is a regressive tax. The hardest hit are wage earners, savers, and pensioners on fixed incomes – as well as those who own few or no tangible assets.
House Bill 3377 amends the South Carolina Code of Laws to define gold and silver as legal tender. This measure would include gold and silver minted foreign and domestically, and provides that no person or entity may compel another person or entity to tender or accept gold or silver unless agreed upon by the involved parties. This measure seeks to bring South Carolina's policies on gold and silver in compliance with Article 1, Section 10 of the US Constitution.
Representative Jones's final resolution, House Joint Resolution 3379, would create a study committee to determine the feasability and efficacy of the establishment of an in-state depository to store gold, silver, and other metals for the state's reserves and investments.
Policies that penalize savers in precious metals reduce the likelihood that citizens will take prudent steps to insulate themselves from the inflation and financial turmoil caused by the Federal Reserve.
With the backing of the Sound Money Defense League, these measures are a few of many sound money bills being introduced across the country this year. Several bills to remove taxation on sound, constitutional money are also being, or have been, introduced in Tennessee, Hawaii, Idaho, Maine, Mississippi, Alabama, and more.