The Maine legislature narrowly failed to pass a measure which would help Pine Tree State citizens protect themselves from federal dollar devaluation.
Introduced by Representative Justin Fecteau, Legislative Draft 1277 would have removed sales and use tax on purchases of gold, silver, platinum, and palladium coins and bullion in Maine.
While the measure received an “ought not to pass” recommendation from the heavily left-leaning Joint Taxation Committee, LD 1277 still narrowly failed to pass out of the Maine House of Representatives by a vote of 76-69, with six absent votes. The bill failed to pass out of the Maine Senate with a straight party line vote, 22-13.
The Maine legislature has considered similar measures over the last several years, gaining more support each time. The Sound Money Defense League will continue educating Maine lawmakers as to the benefits of ending taxation on sound money.
Under current law, Maine citizens are discouraged from insuring their savings against the devaluation of the dollar because they are penalized with taxation for doing so. Eliminating the tax on gold and silver is important for a few reasons:
- Taxing precious metals is unfair to certain savers and investors. Gold and silver are held as forms of savings and investment. Maine does not tax the purchase of stocks, bonds, ETFs, currencies, and other financial instruments.
- Levying sales taxes on precious metals is inappropriate. Sales taxes are typically levied on final consumer goods. Computers, shirts, and shoes carry sales taxes because the consumer is "consuming" the good. Precious metals are inherently held for resale, not "consumption," making the application of sales taxes on precious metals inappropriate.
- Taxing gold and silver harms in-state businesses. It’s a competitive marketplace, so buyers will take their business to neighboring states, such as New Hampshire, which has no sales tax on precious metals, thereby undermining Maine jobs. Levying sales tax on precious metals harms in-state businesses who will lose business to out-of-state precious metals dealers. Investors can easily avoid paying $107.25 in sales taxes, for example, on a $1,950 purchase of a one-ounce gold bar.
In total, 40 states have reduced or eliminated sales tax on the monetary metals.
- 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, Mainers on fixed incomes, wage earners, savers, and more.
LD 1277 is one of many sound money bills introduced across the country this year. Bills to remove taxation on sound, constitutional money were also considered in Alabama, Hawaii, Iowa, South Carolina, Tennessee, and more.
Backed by the Sound Money Defense League, these measures protect Maine citizens by removing barriers to insulating their wealth with the only money proven to protect against the Federal Reserve Note’s ongoing devaluation.