This story appears in the March 31, 2019 issue of Forbes.
WHEN YOU EXCHANGE a $20 bill for two $10 bills, you don’t pay sales tax on the transaction, even though, theoretically, you are “buying” the tens. The notion is utterly preposterous. Yet if you purchase a gold coin that was created by the U.S. Mint and is legally usable for commercial transactions, in some states you have to pay sales tax on that coin. Uncle Sam also says people who buy and sell such coins are liable for capital gains taxes. Of course, you would never buy a silver dollar from the mint for, say, $35 and then use it to pay for a $1 candy bar, but the point is that such coins are legal tender.
That’s why the White House should follow the recommendation of the American Principles Project, an organization that, among other things, advocates sound money: “President Trump should direct the U.S. Treasury Department to issue a rule ending taxation on U.S.-minted gold coins.” While we’re at it, let’s add silver ones as well.
It’s only a matter of time before Washington undermines the value of the dollar again, and people should be able to hedge themselves against such depredation. And someday soon, Congress should allow Americans to use alternative currencies for domestic commercial transactions if they so wish.
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