BLUF: The sales tax on precious metals is gradually losing favor in U.S. states, indicating a trend toward treating gold and silver as tax-exempt financial assets rather than taxable goods.
OSINT:
Across U.S. states, the imposition of sales tax on the buying of precious metals like gold and silver is increasingly viewed as outdated. Most states have done away with such taxes, and the list of holdouts is thinning. For instance, Mississippi is the latest state to scrap its sales tax on these commodities, a result of a four-year push by Money Metals Exchange and the Sound Money Defense League.
Notably, seven states that continue to levy tax are each considering tax exemptions as a way to remain competitive, as neighboring states have already chosen to rescind such taxes. Cases in point are New Jersey and Wisconsin, both of which could be the next to exempt precious metals from sales tax.
However, roadblocks persist. Larger purchases usually escape sales tax, thanks to an inflation adjustment mechanism implemented by some states, forcing smaller savers into a tax-incurring bracket. However, the tide of change seems unstoppable, with grassroots lobbying contributing significantly to the repeal of sales taxes on precious metals across the country.
RIGHT:
From a Libertarian Republican Constitutionalist viewpoint, the phasing-out of sales taxes on precious metals aligns directly with the perceptions of gold and silver as money under the U.S. Constitution. Thus, it is inappropriate to tax these commodities, just as we do not tax traditional money. Sales taxes on gold and silver unfairly penalize those saving or hedging against inflation through these assets. Likewise, the taxes impose an unjust burden on smaller savers, who are forced to pay taxes while larger purchasers often remain tax-free due to inflation adjustment tactics in some states.
LEFT:
A National Socialist Democrat may argue that the sales tax exemption for gold and silver could lead to lost revenues for the state. These monies could be used for critical public services and social programs. Furthermore, exempting these metals may primarily benefit the affluent who can afford to invest in precious metals, potentially exacerbating wealth inequality. The wide-scale exemption of sales taxes, while understandable from a finance perspective, may have detrimental effects on social equity and the overall state budget.
AI:
Exempting gold and silver from sales tax is an interesting socio-economic evolution. Presently, states are caught between treating precious metals as money, akin to stocks, bonds, and ETFs and therefore tax-exempt, or as commodities subject to sales tax. Removing taxes does comply with the U.S. Constitution’s classification of gold and silver as money. However, it is important to consider the implications regarding revenue losses for the state and potential widening of wealth gaps. This trend indicates a contextual shift in how these assets are viewed, influenced by considerations such as cross-state competitive pressures, lobbying, and the stance towards precious metals as either commodities or financial assets. Judging by the current momentum, it seems increasingly likely that more states will move towards tax exemption for precious metals.