This landmark legislation, effective from August 1, will also eliminate the state capital gains tax on these precious metals, making them more appealing to investors.
Enactment Of House Bill 1718 (HB1718)
House Bill 1718 (HB1718), sponsored by Rep. Robin Lundstrum (R) and Sen. Jonathan Dismang (R), now recognizes "gold and silver specie" as a medium of exchange in the state.
This allows citizens to utilize gold or silver coins as regular money, thus creating a more favorable framework for conducting transactions with these precious metals.
The definition of "specie" under the law includes gold or silver coins minted by the U.S. government or other authorized entities, as well as refined gold or silver bullion marked with its weight and purity.
Furthermore, the court can designate additional forms of specie as legal tender, enabling Arkansas to be less dependent on U.S.-minted gold and silver, and allowing the state's citizens more autonomy in defining their tender.
The tax benefits of this legislation are numerous. With the elimination of state capital gains tax on gold and silver, transactions involving these metals will not incur any tax liability.
In 2021, Arkansas repealed the sales tax on gold and silver, further reducing the investment costs for these precious metals.
Repealing these taxes also paves the way for gold and silver to be used more readily in everyday transactions. With growing electronic payment services, the use of precious metals for purchases is more feasible than ever.
By eliminating these taxes, these metals are treated as money rather than commodities, subtly challenging the Federal Reserve's monopoly on money.
The Impact On Federal Reserve's Monopoly
The decision to eliminate these taxes aligns with the perspective of former US Rep. Ron Paul, who believes that money should not be taxed.
He asserts that paper money is not genuine and allows the government to deceive and commit fraud, leading to the increased size and scope of government.
This legislation is a small but crucial step toward currency competition and will encourage the use of specie in regular business transactions.
The Federal Reserve's monopoly on money has allowed it to create fiat currency, leading to an inflationary system that devalues purchasing power over time and fuels unsustainable government spending. By contrast, a sound money system based on gold and silver would impose fiscal discipline.
Sales tax repeals are a strategic approach to undermine the Federal Reserve's fiat money system, beginning at the state and local levels.
As more people start using gold and silver instead of Federal Reserve Notes, a "reverse Gresham's Law" effect may occur, where good money drives out bad money. This could, over time, result in a flow of real wealth toward the state's treasury, increased banking business, and a call against the use of Federal Reserve notes.
In this way, Arkansas is paving the way for a broader movement at the state level to support sound money, pushing for greater financial autonomy and a healthier economic environment.
What potential impacts might the decision to make gold and silver legal tender in Arkansas have on the Federal Reserve's monopoly and the broader U.S. monetary system?
Should other states follow Arkansas's lead in making gold and silver legal tender, and what might be the potential benefits and challenges of such a decision?
Today in precious metals, gold prices grew 0.40% to $1,941.20 per ounce. Silver spiked 0.20% to $23.50 per ounce. Platinum increased by 0.44% to $918.70 per ounce, while Palladium sunk by 0.12% to $1,256.17 per ounce. Bitcoin dropped 0.48% to $29,043.00.