(Charleston, West Virginia, USA – January 11th, 2023) – Another pro-sound money legislative effort has been introduced in West Virginia.
Del. Chris Pritt has introduced House Bill 2333, the “Legal Tender Act.” This measure would establish gold and silver as legal tender in West Virginia, as well as create a nonrefundable tax credit for the use gold and silver in West Virginia on state taxes.
Arizona, Utah, and Wyoming have enacted similar measures into law. Idaho has considered this measure recently and a similar measure is expected to be heard before the Oklahoma legislature this year.
In recent decades, monetary gold and silver -- and dollars redeemable in gold and silver -- have been supplanted by the Federal Reserve Note as America’s currency. However, an increasing number of West Virginia citizens are realizing that holding gold and/or silver as a form of savings can help protect against the ongoing devaluation of the Federal Reserve Note.
Here are a few reasons why slapping an income tax on the monetary metals is wrong:
- Current West Virginia 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 West Virginia uses federal adjusted gross income (AGI) as a starting point for West Virginia income calculations, this nominal gain is taxed again by the Mountain State.
- 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.
- Taxing imaginary gains is harmful to citizens attempting to protect their assets. Investments in precious metals coins and bullion are rightly exempt from West Virginia sales tax. Neutralizing West Virginia income tax treatment of the monetary metals would remove the last major disincentive in the state that stands against the ownership and use of the monetary metals.
The Sound Money Defense League strongly supports this measure and is actively working with lawmakers in West Virginia to support House Bill 2333.
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