The Impact of Inflation
Inflation has severely impacted Americans' living standards, with a 23% increase in the cost of living since 2019. This economic pressure has shifted many from affluent to middle class, from middle class to working class, and from working class to impoverished. According to recent surveys, inflation is a top concern, with many Americans reporting worsening financial situations.
The Root Cause: Unbacked Paper Money
Inflation is primarily caused by the expansion of the money supply, which devalues the currency. The U.S. experienced minimal inflation until the establishment of the Federal Reserve in 1913. Since then, the transition from a gold-backed currency to unbacked paper money has led to significant inflation. Key historical events, such as the end of the Gold Standard and the introduction of quantitative easing (QE), have exacerbated this issue.
Gold and Silver as Inflation Hedges
Despite the devaluation of paper money, gold and silver have historically preserved wealth. Unlike fiat currency, these precious metals cannot be printed, maintaining their value over time. However, the U.S. government taxes capital gains on gold and silver at a high rate, treating these gains as collectibles, which discourages their use as a hedge against inflation.
The Call for Change: The Monetary Metals Tax Neutrality Act
A new legislative proposal, known as The Monetary Metals Tax Neutrality Act (H.R. 8279), aims to eliminate federal capital gains taxes on gold and silver bullion. Introduced by Rep. Alex Mooney and supported by the Sound Money Defense League, the bill argues that gold and silver are money, not collectibles, and should not be taxed as such. This change aligns with a broader trend of states removing sales taxes on precious metals.
Conclusion
Ending the unfair taxation of gold and silver would provide Americans with a viable means to protect their wealth from inflation. Support for The Monetary Metals Tax Neutrality Act is crucial for promoting sound money and financial justice. Advocates are encouraged to contact their representatives and support the bill to ensure fair treatment of gold and silver as stores of value.