By Dr Jeffrey Lewis
In an unprecedented modern move, the Federal government is considering a new investment tax as a way of paying for a huge annual deficit. The investment tax would cost investors .25% on purchases of stocks and exchange-traded funds outside of retirement accounts and would generate an estimated $90 – $100 billion in annual income for the US Treasury.

Nothing is Safe
If there is anything that the Federal Government has proven in the past two years, and even many years prior, no amount of private property is safe from the power-hungry arm of government. SEC rules have already declared that the government has the right to seize investors assets in time of intense economic hardship, and this new bill drafted by Congress opens the door for the government to steal parts of your wealth via taxation, if only penny by penny. Although the new .25% tax would generally have little effect on investor wealth, it opens the door for confiscation of larger quantities of your investment dollars via taxation.

Metals and Taxation
Though capital gains taxes on Gold and Silver are hardly favorable for investors since metals are taxed like collectables, perhaps metals investors are getting a better deal after all. The new taxation scheme is garnering some attention and traction among lawmakers, with 27 members of the House now co-sponsoring the bill. Lawmakers are increasingly interested after learning that a similar scheme in the United Kingdom generates $30 billion annually, and it has met very few complaints. However, passing such bill in this political climate seems difficult, if not impossible, but tax hikes are eventual should the government continue to spend like there is no tomorrow.

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Gold and Silver Safety
Luckily, should an investment transaction tax be enacted, Gold and silver in the form of coins and rounds will remain untaxed, while metals trading on the open market in futures contracts would be taxed. This presents an interesting opportunity for investors to begin revving up their purchases of physical gold and silver before a tax of this magnitude has even come to a vote. As we all know, new taxes can appear in a matter of weeks, and as the budget deficit grows, so does the incentive for lawmakers to pass a new tax, especially on the Wall Street so many politicians condemn.

A New Discussion
It should be settled that no investment, large or small, is ever out of the jurisdiction or interest of the Federal Government, and all vehicles are open to all new forms of taxation. With Congress considering a slew of anti-investing bills that can seize your assets, create forced deposits into new “R-bonds” (Treasury bonds rebranded for retirement accounts), and now even tax each and every investment you make, it’s time to try something new.

With all these laws on the table, and the investing public demanding safety, investors can be sure that the few instruments that will truly protect their wealth is physical gold and silver. Nothing else can protect your assets from inflation or taxation.

The author is a medical practitioner and serves as the editor of Silver-Coin-Investor.com

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