(Olympia, Washington, USA - January 14, 2022) - Washington State removed sales taxes against sound money decades ago, but a lawmaker hopes to take it a step further. House Bill 1417, introduced in 2021 by Representative Rob Chase and co-sponsored by Representative Bob McCaslin, seeks to eliminate all Evergreen State taxes on the only form of money mentioned in the U.S. Constitution.
Washington has had a long standing sales tax exemption on sound money, but there have been several attempts over the last couple of years to repeal this law. House Bill 1417 would ensure "the exchange of one type or form of precious metal bullion made of gold or silver, or monetized bullion, for a type or form of legal tender may not give rise to any tax liability."
By eliminating capital gains and sales taxes on precious metals, Washington would stand among the best states in the union on this issue. Here are a few reasons why slapping an income tax (or any tax) on gold and silver is wrong:
- Current Washington law assesses taxes on imaginary gains. Under current law, a taxpayer who sells precious metals may end up with a capital “gain” in terms of Federal Reserve Notes. This capital “gain” is not necessarily a real gain, it’s often a nominal gain that results from the inflation created by the Federal Reserve and the attendant decline in the dollar’s purchasing power.
Yet this nominal gain is taxed at the federal level – and, because Washington uses federal adjusted gross income (AGI) as a starting point for Washington income calculations, this nominal gain is taxed again by the Evergreen State.
- Inflation harms the poorest among us. Inflation is a regressive tax. The hardest hit are wage earners, savers, and pensioners on fixed incomes – as well as those who own few or no tangible assets.
- Taxing imaginary gains is harmful to citizens attempting to protect their assets. Investments in precious metals coins and bullion are rightly exempt from Washington sales tax. Neutralizing Washington income tax treatment of the monetary metals would remove the last major disincentive in the state that stands against the ownership and use of the monetary metals.
The Sound Money Defense League strongly support and are actively working with lawmakers in Washington to ensure passage of this important measure. Kentucky, Mississippi, Hawaii, and Alabama are just a few of the other states fighting their own sound money battles in 2022.
Jp Cortez is the Executive Director for the Sound Money Defense League, a non-partisan, national public policy group working to restore sound money at the state and federal level, and lead author of the Sound Money Index.
