The Missouri Senate passed a bill today that would require the state treasurer to allocate at least 1% of the state's funds to silver and gold. It also eliminates all state income taxes related to monetary metals.
Due to the rising cost of living and the national backlash against the runaway inflation caused by the central bank money printing and excessive government spending, more states are considering introducing sound money bills in 2023.
The Senate Bill 100 bill, which was sponsored by Senator Bill Eigel, was approved by the Missouri Senate and sent to the House.
In addition to being money, SB 100 also reaffirms that silver and gold are legal tenders in Missouri. Taxpayers would no longer be required to pay state income taxes on capital gains from silver and gold reported on their federal tax returns. The state treasurer would be required to hold at least a 1% of the state's funds in silver and gold. It would require the state to accept coins as payment for various debts and obligations.
Several years ago, the Show Me State exempted silver and gold from sales taxes. Eliminating income taxes from these precious metals and converting them into reserve assets can help promote sound money in the state.
Several other states, including Wyoming, Arizona, and Utah, have also exempted income taxes from gold and silver.
In Wyoming, the Senate passed a bill last week that would require the state's treasurer to hold at least 1% of the state’s funds in silver and gold to protect the state's assets. It also proposes a mechanism that would allow the state to pay certain taxes in silver and gold.
Income tax exemption from silver and gold is generally beneficial for several reasons.
Missouri's law currently assesses income on capital gains from the sale of precious metals. A taxpayer who sells silver or gold may end up owing a capital gain on the Federal Reserve Notes, which is not a real gain but a nominal gain due to the decline in the dollar's purchasing power and the inflation created by monetary policy.
Despite being a nominal gain, this income is still subject to state income taxes because the Show Me State uses the AGI as its starting point for calculating income.
One of the main reasons why inflation has been considered a regressive tax is it affects the poorest individuals. These include wage earners, pensioners, and savers.
Making people believe that they are getting a real gain when in reality they are merely taking imaginary profits is harmful to their efforts to protect their assets. Removing the state's income tax on monetary metals would be a major relief to Missourians.
Despite the positive effects of gold and silver in reducing volatility and increasing real returns, Ohio is the only state that still holds physical gold in its funds.
Most states have significant exposure to debt paper, such as bonds. Due to the high inflation rates, these bonds have a negative real rate of return.
Due to the current economic situation, several states have started considering the possibility of holding gold and silver as financial insurance. Several bills related to this matter have also been introduced in various states this year.
Currently, Missouri is ranked 32nd in the Sound Money Index, which measures the state's financial performance. If SB 100 passes, it would make the Show Me State one of the top states in the country.
Last week, the Wyoming Senate passed SF 101, which made Missouri the second state to adopt sound money legislation in 2023.
In 2023, over a dozen states have started introducing pro-sound money bills. Some of these include Oklahoma, West Virginia, Mississippi, Alaska, Tennessee, Florida, and Kentucky.
The preceding article is a summary of an article that originally appeared on Headline USA