North Carolina has a chance to protect its citizens from the harmful effects of inflation by passing House Bill 836, the North Carolina Sound Money Act, which eliminates the state capital gains tax on gold and silver. Having rightfully exempted constitutional money from state sales tax in 2017, removing the income tax on gold and silver is the next logical step for the state to take.
The ferocious wave of inflation North Carolinians, and Americans at large, face today is largely caused by the Federal Reserve. However, North Carolina and other states don’t have to sit idly by while citizens suffer from a broken monetary system.
Introduced by state Rep. Mark Brody, R-Union, HB 836 would remove the last major disincentive imposed by the state to store wealth in time-tested assets such as gold and silver. Gold and silver have historically served as a hedge against inflation and currency devaluation.
In fact, that’s why America’s founding fathers were very explicit about the benefits of money based on honest, scarce assets such as gold and silver, and warned of the danger of unbacked paper money, such as the Federal Reserve Note, commonly known as the US Dollar, that citizens use today.
Yet, under current North Carolina law, taxpayers who sell precious metals may face a capital “gain” in terms of Federal Reserve Notes. This “gain” is often nominal, or a “paper gain,” not a real one, reflecting the Federal Reserve Note’s declining purchasing power.
This artificial gain is taxed at the federal level, and because North Carolina bases its state taxes on federal income, it’s taxed again by the Tar Heel State.
This unfair tax is harmful to citizens who protect their assets in gold and silver. Inflation, a regressive tax, hits wage earners, savers, pensioners on fixed income, and those with few or no tangible assets the hardest.
Policies that penalize savers in precious metals reduce the likelihood that North Carolinians will take prudent steps to insulate themselves from financial turmoil caused by Congress and the Federal Reserve.
By passing this measure, North Carolina would join 14 other states, including Idaho, Alabama, and Nebraska, who have passed comparable bills in their respective states in the last year. States like Iowa and Kansas are considering similar measures to end this tax.
Since 2014, the Sound Money Defense League, the nation’s preeminent sound-money policy group, which I head as executive cirector; and Money Metals Exchange, a leading online national precious metal dealer, have been the primary engines behind the nationwide movement to enact pro-sound-money policies and further sound money education at the state and federal level.
Eliminating the capital gains tax on gold and silver allows people to adopt their own personal gold standard. Citizens of North Carolina and elsewhere should have the freedom to choose how they store their wealth, and taxation on precious metals restricts this choice.
North Carolinians deserve an alternative to perpetually eroding money. H 836 empowers savers, from pensioners to small business owners, to save in the only form of money mentioned in the US Constitution. Lawmakers should support HB 836, and citizens should click here to find contact information for key legislators considering the bill. This is our chance to make North Carolina a leader in sound money. Support House Bill 836.