Misguided by archaic monetary thinking, the Oklahoma Legislature has declared gold and silver U.S. coins to be legal tender in the state and exempted sales of gold coin from any nation from state sales taxes.
Previously, only investment sales of gold stored in recognized depositories were exempt from sales taxes.
Gold U.S. coins may be legal tender, but are they money? If you think so, try to buy a pack of gum with one and see if you can come to an agreement with the clerk about how much change you’re owed.
U.S. currency is certainly legal tender, and what’s more, it’s money. It’s recognized as a tool of commercial exchange at a commonly agreed value. It’s so safe that it’s the international standard for setting the value of everything, including gold.
Removing the sales tax on gold and silver purchases shorts the state treasury from revenue for priorities such as schools, roads and public safety in an effort to pander to the gold bugs.
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Proponents say the sales tax is double taxation because gold and silver are also subject to capital gains taxes when sold. That seems to be based on the legal tender idea, i.e. that there is something special about gold and silver. Why else would you treat gold collectors any differently from collectors of antiques or art work, both of which are subject to sales taxes and capital gains taxes, according to the Oklahoma Tax Commission.
In fact, there is nothing special about gold and silver except that they are rare, coveted and historically associated with value. Their real value is merely as a superstitious hedge against economic catastrophe.
If that’s your investment strategy, bully for you. We hope you get richer than Rockefeller. But you ought to pay your fair share of taxes in the process, and you might keep a few greenbacks in your wallet too. You know, for gum.