Gold is king... but taxes?

Discussion in 'Economics' started by bob2007, Apr 27, 2011.

  1. bob2007


    So, i was watching a youtube video on the fall of the roman empire and its relation to economics. Summary: Gold stood the test of time for value vs inflation (Roman Govs. diluting its gold coins).

    However... in today's world, to maintain a storage of value. We'd have to consider the effects of capital gains tax?

    i.e. if Gold soars to 10k USD an ounce... wouldn't the tax effects negate the storage of value that we are trying to maintain?
  2. TD80


    If gold goes to 10k/ounce in the very near future under the context of inflation (i.e. everything hard asset-wise goes up proportionally not just a gold bubble), I dare say you won't need to be worried about taxes if you own physical, especially coins.

    The whole system will go sideways in that scenario and the Italians (where tax evasion is national sport) will be paying more income tax than the average american, just watch the crazy levels of delinquency and black market activity when people can't feed their families.
  3. bob2007


    I wasn't trying to suggest hyperinflation in the near future, just the increase in Dollars / ounce and its resulting tax consequences.

    Off the top of my head and further consideration... I suppose the tax rates would be readjusted and minimum capital gains etc.
  4. rew


    Gold and silver are taxed as "collectibles" when sold.
  5. When gold soars, holders are not really "making money"... sure, more in nominal dollars... but gold's price really just reflects the loss in buying power of the fiat.

    So... if you were smart enough to have all of your assets in gold.. and gold doubled in price right along with the price of everything... you'd have "broken even" on maintaining the buying power of your wealth.

    Well, except for taxes. The capital gains tax would mean that you still LOST and the government still confiscated a portion of your wealth.. not as much as if you didn't have the gold, but you still lost.

    Similar to having your assets in a currency which appreciates...

    IOW... It's difficult to overcome rising prices, loss of buying power, destruction of your currency and taxes in an inflationary environment.
  6. achilles28


    Capital gains tax on precious metals is a gigantic scam.

    Cash to buy gold = no paper trail.
  7. AK100



    One of the reasons for owning gold is to get money/wealth out of the system.
  8. achilles28


    Yup. It's rumored some production jewelers can be amenable. Spot + small commish

    Theoretically, one could always buy through traditional channels, then declare a sale, but not really dispose of it. Problem is, that's tax evasion which amounts to a big pile of trouble.

    Here's another thought: why should we pay tax on profits made from investing after-tax income? It's bullshit. That's why it's so hard to build wealth - we're taxed up the ass. Everyone knows the most fragile stage of wealth creation is the beginning. The nest egg. And look how difficult it is to build that nest egg when half of it is siphoned off to the State and Federal Government to piss away! For every 2 dollars I make, they take one! And if I invest that dollar into 2, they take 25 cents! And that doesn't include all the "miscellaneous" taxes along the way to get there: property tax, sales tax, gas tax, excise tax. Lest of all, the inflation tax (currency debasement)! At the end of the day, if I make 3 dollars, the Government takes at least 1.50$. HALF. I took all the risk, provided all the capital, worked my ass off, and this leech of a partner who contributed absolutely NOTHING to my business takes HALF of everything I make. It's the mafia.

    Why not reward savings through a consumption tax, since that's the genesis of all investment which creates wealth? Instead, it's totally backward. The Government is an enormous parasite that bribes us with one quarter of the money they take from us, then gives the rest to special interests who keep them elected. It's a gigantic cesspool of corruption. Yet, we must pay their shakedown money or they'll take everything we own and lock us up. That's mafia rules.
  9. bob2007


    Only problem is trusting the gold dealer that doesn't pay taxes, who's trying to scam the gov, why wouldnt he just cam u?
  10. achilles28


    Lots of people deal strictly in cash and don't cheat customers. Why? Their livelihood depends on serving customers. Not Government.
    #10     Apr 28, 2011