Representatives in the Ahola State believe that taxing real money is wrong and they hope to do something about it.
Introduced by Representative Val Okimoto (36-R) and Representative Dale Kobayashi (23-D), House Bill 1184 removes general excise tax on purchases of gold and silver coins and bullion in Hawaii.
Under current law, Hawaii citizens are discouraged from insuring their savings against the devaluation of the dollar because they are penalized with taxation for doing so. Passage of this measure would remove disincentives to holding gold and silver for this purpose. HB 1184 is important for a few reasons:
- Levying taxes on precious metals is inappropriate. Precious metals are inherently held for resale, making the application of taxes on the purchase of precious metals inappropriate.
- Studies have shown that taxing precious metals is an inefficient form of revenue collection. The results of one study involving Michigan show that any tax proceeds a state collects on precious metals are likely surpassed by the state revenue lost from conventions, businesses, and economic activity that are driven out of the state.
- Taxing gold and silver harms in-state businesses. It’s a competitive marketplace, so buyers will take their business online, thereby undermining Hawaii jobs. Levying taxes on precious metals harms in-state businesses.
In total, 39 states have reduced or eliminated taxes on the purchase of monetary metals.
- Taxing precious metals is unfair to certain savers and investors. Gold and silver are held as forms of savings and investment. Hawaii does not tax the purchase of stocks, bonds, ETFs, currencies, and other financial instruments.
- Taxing precious metals is harmful to citizens attempting to protect their assets. Purchasers of precious metals aren't fat-cat investors. Most who buy precious metals do so in small increments as a way of saving money. Precious metals investors are purchasing precious metals as a way to preserve their wealth against the damages of inflation. Inflation harms the poorest among us, including pensioners, Hawaiians on fixed incomes, wage earners, savers, and more.
This measure is one of many sound money bills being introduced across the country this year. Idaho and Wyoming plan to consider a measure to empower the state treasurer to hold physical gold and silver in state coffers. Bills to remove taxation on sound, constitutional money are also being, or have been, introduced in Alabama, Mississippi, Iowa, South Carolina, Tennessee, and more.
Backed by the Sound Money Defense League, these measures protect Hawaiian citizens by removing barriers to insulating their wealth with the only money proven to protect against the Federal Reserve Note’s ongoing devaluation.