Comment by SilverElfin
Comment by SilverElfin 2 days ago
Taxing bullion is absurd - it’s not a product but more like currency or a placeholder of money you already have. What other taxes are they passing when you say “frenzy”?
Comment by SilverElfin 2 days ago
Taxing bullion is absurd - it’s not a product but more like currency or a placeholder of money you already have. What other taxes are they passing when you say “frenzy”?
Well it's more like a currency than any other object because it has been used historically to either a) be the currency, or b) back the currency. Sure that's not true today in the United States, but like, it's obviously different than frozen concentrated orange juice... can we not at least agree on that pretty tame assumption? Or is this just some semantics race to non-meaning?
Iron ore is similar physically, but it's really just a raw input material/ingredient used for heavy industrial manufacturing and production, it's never been intended to be an appreciating asset/hedge against inflation.
I'm unfamiliar with whatever tax is being referred to in this specific comment thread, but I'd be curious how something like $SIVR is handled, considering it's backed by actual silver in vaults. That could lead to some unintended consequences if the investment plans of a lot of money suddenly changes how it's being allocated.
> Iron ore is similar physically, but it's really just a raw input material/ingredient used for heavy industrial manufacturing and production, it's never been intended to be an appreciating asset/hedge against inflation, not any intrinsic property of gold itself.
Gold is not intended to be an asset/hedge against inflation either. Market participants believe that gold has value and that it can hedge against inflation. The belief is what gives life to gold being as a hedge against inflation.
Gold is not an asset, it’s a commodity, an industrial input, and material for jewelry, and for some reason I fail to understand, people buy and hold it because they believe it is an asset that will appreciate in value, but it’s just an elementary metal that is useful for being easy to work with (jewelry) and because it doesn’t oxidize. It does not generate income, you can’t eat it, and in a post-apocalyptic scenario, it’s useless. I suppose the density of gold would allow some very small, very high mass slingshot balls you could defend yourself against people with?
A system is what it does, and gold is popular for jewelry because it’s a useful way to wear money.
Off topic and this might be apocryphal, but I heard on the internet a good reason to keep “money” in the form of gold chains and other jewelry, is that it counts as personal property, so if you’re arrested during a drug bust or trafficking women, your cash and bank accounts may be seized, but whatever you wear to prison gets put in a ziplock bag and returned to you when you leave :)
> What other taxes are they passing when you say “frenzy”?
https://www.ballardspahr.com/insights/alerts-and-articles/20...
It's incomplete, it doesn't list the gold tax.
Not my downvote, but the least devastating tax is only on commerce, and it has to be at insignificant levels to keep from resuting in undue damage.
Taxing wealth, property, wage income, or just plain existence has always sapped productivity like few other things.
It's foolish to try and tax "wealth" when you should instead be taxing the creation of wealth as it's in progress and nothing else. When actual ongoing business operations are going forward is the only time anybody can truly afford to pay any significant tax at all. Even if they are billionaires, and I say this as someone at the complete opposite end of the spectrum.
Ordinary wage income doesn't even make sense to tax whatsoever when you want max productivity, unless income is excessive enough to reach so far above average that greater capitalist profits can be earned on the surplus. Then maybe more than just those gains should be taxed.
This investment is now taxed more than other types of investment. Is sales tax charged when you buy stock? Should it be?
Because we need a low risk system to track whether people are net-contributing or -draining society's resources, otherwise it isn't easy to tell who is creating more wealth so they can be supported. Gold remains the best option after centuries (if not millennia) of experimentation.
Gold is not an investment. It takes otherwise productive capital out of the economy and produces nothing. It's functionally no different than stuffing your money in a mattress.
It has utility though: unlike the dollars in your mattress, it can't be printed into oblivion by your central bank. It is relatively portable, and people have flocked to it as a store of value especially during periods of socioeconomic instability when assets are going down and gov't spending is going up. It's tradeable for fiat in any country, so it allows you to bring value along if you relocate.
Its price reflects that utility and like any modern asset, a lot of speculation. You can speculate on whether it's more or less useful given current events -- nothing wrong with speculating that it is only going to be increasingly useful.
What is it that you're arguing for then? That there be some entity that gets to decide what is and isn't a productive use of all of our excess money? Who gets to decide what's excess? Who gets to decide what is and isn't a productive use of the money?
How is this any different than buying a house? Buying a house that's already been built is pretty damn close to the same thing as buying gold. No new "work" is being done into the economy, you're just exchanging dollars for an asset that will likely appreciate a bit faster than inflation but less than $SPY.
The person you bought it from can do something else with that money, sure, but that's also true of the other person in your transaction to buy gold.
Maybe you'll say a house has more utility than bars of gold, but all of this at the end of the day, seems to come down to your specific views and judgements of what it means for capital to be used productively. So to circle back to the beginning, what is it you're advocating for here? That because you don't see gold as a low risk hedge against inflation as being "productive" it should face more taxes to incentivize it not happening?
In physical metals that don’t generate income or induce further economic activity, I don’t believe so. What good does a hunk of gold sitting in a safe do for the economy?
>What good does a hunk of gold sitting in a safe do for the economy?
Not a whole lot once legal tender certificates can no longer be redeemed for the same amount of metal year after year.
Why is it more like a currency than any other object? It's not negotiable currency or legal tender.
People buy it and sell it. I don't see any difference between bullion, iron ore, frozen concentrated orange juice, and Pokemon cards. You buy a thing, you pay the sales tax.