Arizona panel OKs gold, silver as legal tender

[Newsjock]

Source: Capitol Media Services

Calling it a "constitutionally protected right,'' a House panel voted Wednesday to allow — but not require — the state and businesses here to accept gold and silver coins as legal tender.

Rep. Mark Finchem, R-Oro Valley, said the problem with a system based solely on federal reserve notes is that it is subject to inflation. Put simply, the buying power of each dollar decreases over time.

... But the real purpose of the law appears to be to protect those who invest in the coins from taxes. Right now gold and silver is treated like any other commodity or stock. If someone buys something at $500 and sells it at $1,500, they have a capital gain of $1,000 which is taxable.

There is nothing Arizona can do about the Internal Revenue Code. But SB 2173 would spell out that the buying and selling of such coins is not an investment under Arizona law and therefore not subject to state capital gains taxes.

Read more: http://tucson.com/news/state-and-regional/arizona-panel-oks-gold-silver-as-legal-tender/article_c0d30386-acae-11e4-9365-bbfff7381409.html

[MFrohike]

1. Heh

""When we have a fiat currency that is continually bouncing up and down relative to the price of oil and other market conditions, we are at risk,'' he said."

If his concern was really the volatility of a currency, he'd be arguing to make it non-convertible. Of course, if he understood that, he wouldn't be a goldbug.

[daredtowork]

2. What about income taxes? nt

[muriel_volestrangler]

3. It wouldn't count as 'income' under anyone's definition

You don't get income from gold or silver; they just sit there. If you sell them for more than you paid, you make a capital gain; for less, and it's a capital loss.

If someone set up a business that traded the metals, and got dividends or a salary from it, that would be an income.

[daredtowork]

5. This post declared those metals legal tender

So it seems to me if they aren't capital gains, then they should count as income once traded.

[muriel_volestrangler]

6. What kind of definition are you proposing?

'Capital gains' does fit the gains made with them, but a dictionary or IRS definition of 'income' doesn't.

[daredtowork]

7. I don't think they should be legal tender. nt

[muriel_volestrangler]

8. I agree with that; but that doesn't make them 'income'

They should be subject to capital gains tax. They fit that precisely.

[daredtowork]

9. perhaps I am confused over the definition of legal tender

If they were made legal tender to avoid capital gains tax, that means that one they are traded it's money. If you receive money, isn't it income?

[kelliekat44]

4. Again...a way for the rich to avoid paying their fair share of taxes. nt