In Missouri, Rep Doug Richey filed HB1867 on Dec. 11. Rep. Bill Hardwick filed HB1955 on Dec. 15. The bills are companions to SB735 filed in the Senate by Sen. William Eigel earlier this month.

In Oklahoma, Sen. Shane Jett filed SB1507 and Sen. Nathan Dahm is running SB1508.

The enactment of any of these bills would eliminate state capital gains taxes on the sale and exchange of gold and silver bullion.

Both of these states are already among the 42 that do not levy sales taxes on gold and silver bullion.

Exempting the sale of gold and silver bullion from taxes lowers the investment cost of precious metals. It also takes a step toward treating gold and silver as money instead of commodities. Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs.

Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35-cent tax. Silly, right? After all, you were only exchanging one form of money for another. But that’s essentially what a sales tax on gold and silver bullion does. By eliminating this tax on the exchange of gold and silver, Missouri and Oklahoma would treat specie as money instead of a commodity. This represents a small step toward reestablishing gold and silver as legal tender and breaking down the Fed’s monopoly on money.

“We ought not to tax money – and that’s a good idea. It makes no sense to tax money,” former U.S. Rep. Ron Paul said during testimony in support of an Arizona bill that repealed capital gains taxes on gold and silver in that state. “Paper is not money, it’s fraud,” he continued.

The impact of enacting this legislation will go beyond mere tax policy. During an event after his Senate committee testimony, Paul pointed out that it’s really about the size and scope of government.

“If you’re for less government, you want sound money. The people who want big government, they don’t want sound money. They want to deceive you and commit fraud. They want to print the money. They want a monopoly. They want to get you conditioned, as our schools have conditioned us, to the point where deficits don’t matter.”

GOLD AND SILVER AS LEGAL TENDER

Under provisions in the Missouri bill, gold and silver in physical or electronic form would be accepted as legal tender and would be receivable in payment of all debts contracted for in the state of Missouri. The state would be required to accept gold and silver for the payment of public debts. Private debts could be settled in gold and silver at the parties’ discretion.

Practically speaking, this would allow Missourians to use gold or silver coins as money rather than just as mere investment vehicles. In effect, it would put gold and silver on the same footing as Federal Reserve notes.

Oklahoma took a similar step in 2014. Utah and Arkansas also consider gold and silver legal tender.

The proposed Missouri law also includes provisions authorizing the state to invest in gold or silver “greater than or equal to one percent of all state funds” and to expressly bar any state agency, department, or political subdivision from seizing gold or silver bullion.

BACKGROUND

The United States Constitution states in Article I, Section 10, “No State shall…make any Thing but gold and silver Coin a Tender in Payment of Debts.” Currently, all debts and taxes in the US are either paid with Federal Reserve Notes (dollars) which were authorized as legal tender by Congress, or with coins issued by the US Treasury — very few of which have gold or silver in them.

The Federal Reserve destroys this constitutional monetary system by creating a monopoly based on its fiat currency. Without the backing of gold or silver, the central bank can easily create money out of thin air. This not only devalues your purchasing power over time; it also allows the federal government to borrow and spend far beyond what would be possible in a sound money system. Without the Fed, the US government wouldn’t be able to maintain all of its unconstitutional wars and programs. The Federal Reserve is the engine that drives the most powerful government in the history of the world.

Tax repeals knock down one of the tax barriers that hinder the use of gold and silver as money, and could also begin the process of abolishing the Federal Reserve’s fiat money system by attacking it from the bottom up – pulling the rug out from under it by working to make its functions irrelevant at the state and local levels, and setting the stage to undermine the Federal Reserve monopoly by introducing competition into the monetary system.

In a paper presented at the Mises Institute, Constitutional tender expert Professor William Greene said when people in multiple states actually start using gold and silver instead of Federal Reserve Notes, it would effectively nullify the Federal Reserve and end the federal government’s monopoly on money.

“Over time, as residents of the state use both Federal Reserve notes and silver and gold coins, the fact that the coins hold their value more than Federal Reserve notes do will lead to a “reverse Gresham’s Law” effect, where good money (gold and silver coins) will drive out bad money (Federal Reserve notes). As this happens, a cascade of events can begin to occur, including the flow of real wealth toward the state’s treasury, an influx of banking business from outside of the state – as people in other states carry out their desire to bank with sound money – and an eventual outcry against the use of Federal Reserve notes for any transactions.”

Once things get to that point, Federal Reserve notes would become largely unwanted and irrelevant for ordinary people.

These bills make up part of a broader movement at the state level to support sound money.

Oklahoma State Treasurer Todd Russ and Auditor and Inspector Cindy Byrd are concerned that the RFP gave BlackRock Investments responsibility for 60 percent of the Oklahoma Public Employee Retirement System’s (OPERS) assets—approximately $7 billion— in possible violation of state law.

BlackRock is on a list of companies barred by state law from handling state funds because it boycotts oil and gas companies. The oil industry has been a driver of Oklahoma’s economy for over a century.

State Street, another firm handling state funds, is also on the prohibited list. But it hasn’t drawn quite as much attention as its larger competitor.

This may violate the Oklahoma Energy Discrimination Elimination Act of 2022 (EDEA). The law prohibits state investments from being handled by any firm that boycotts oil and gas producers.

BlackRock representatives did not respond to an email from The Epoch Times. However, in a letter to the Oklahoma Treasurer’s office, BlackRock Senior Managing Director and Vice Chairman Mark McCombe said BlackRock is focused on its responsibility to its clients.

“BlackRock does not boycott energy companies,” Mr. McCombe wrote in the letter.

According to the letter, BlackRock has $319 billion invested in public energy companies worldwide, with $15 billion invested in Oklahoma. More than 90 percent of that is “invested in traditional energies like oil and gas.”

There are indications that the investment firm is separating itself from ESG investing. In recent weeks, BlackRock has stopped using the term. In a report released in August, BlackRock reported backing 7 percent of ESG proposals at company meetings in the 12 months to June, a sharp drop from last year when it supported 22 percent and 2021 when it voted in favor of nearly half.

In the letter, Mr. McCombe pointed out that ESG policies are a reality and that there is a trend of increased government regulation and consumer demand for alternatives to carbon-based energy.

“As fiduciaries, we advise clients on major structural trends that we believe may impact their portfolios. One such trend is the change in government policies, technology, and consumer preferences associated with the transition to a low-carbon economy,” the letter reads. “Our investment decisions are governed strictly by our fiduciary duty to clients, and that duty requires us to prioritize our clients’ financial interests above any commitments or pledges not required by law.”

But Mr. Russ and Ms. Byrd say their concerns go beyond the EDEA law and boycotting oil companies. The pair also questioned the RFP process at the Oklahoma State Pension Commission meeting on Sept. 12. The commission oversees several state pension and retirement funds.

After that meeting, Joseph Fox, OPERS executive director, promised to explain why BlackRock was selected.

Mr. Fox did not return an email from The Epoch Times. However, he did send information to Mr. Russ and Ms. Byrd. In a memo dated Aug. 23—the same day the commission voted to hire BlackRock—Mr. Fox wrote that BlackRock most closely met the requirements set by OPERS for the investment work.

OPERS Claimed Exemption

He wrote that OPERS claimed an exemption under the EDEA law based on its “fiduciary responsibility” to the state employees whose funds are being managed.

“A state governmental entity shall not be subject to any requirement of this act if the state governmental entity determines that such requirement would be inconsistent with its fiduciary responsibility concerning the investment of entity assets or other duties imposed by law relating to the investment of entity assets,” the EDEA exemption reads.

According to the OPERS memo, divesting would cost at least $9.7 million in fees and other costs.

“It is conceivable that the total loss in market value experienced by the plans due to these actions could potentially be multiple times that of the estimated costs stated above,” the OPERS memo reads.

But Mr. Russ said the exemption claimed by OPERS does not apply. He claimed the RFP was written to eliminate most of BlackRock’s competition.

RFP Process ‘Tightened’

Mr. Russ said “rigged” was too strong for the RFP process. But, he said it did appear OPERS officials had one company in mind.

“The RFP within itself wasn’t a problem. They tightened up the RFP to meet the current constituent and investor,” Mr. Russ said.

Ms. Byrd was less diplomatic in her assessment.

“In the auditing world, we do call that practice ‘bid rigging,’” she said.

On Sept. 14, Mr. Russ sent a letter to Mr. Fox and the OPERS Board of Trustees outlining three concerns. Based on those, Mr. Russ wrote, the OPERS board should have selected another firm or sought more applicants.

Mr. Russ sent copies of the letter to the Speaker of the Oklahoma House of Representatives, Rep. Charles McCall, Oklahoma Senate President Pro Tempore Sen. Greg Treat, and Oklahoma Attorney General Gentner Drummond.

Neither Mr. McCall nor Mr. Treat returned calls seeking comment. Phil Bacharach, a spokesman for Mr. Drummond’s office, said the Attorney General had no comment.

In the letter, Mr. Russ wrote that rather than spread the state investments among different managers to reduce risk; the OPERS board kept more than half of the pension funds under BlackRock.

His letter claims five of the eight funds had low or no switching fees. To determine the costs for the last three would require a complete RFP process, which Mr. Russ claims did not happen.

He wrote that respondents were given only three weeks to present their proposals in this case. Mr. Russ pointed out that previous RFPs allowed up to six weeks for a response. He claimed that OPERS summarily decided to keep BlackRock without fully considering the competing firms.

Finally, he wrote that the decision to retain BlackRock’s services violated OPERS fiduciary duties because of BlackRock’s commitment to ESG principles.

“Companies like BlackRock and State Street have openly made commitments to use all assets under management—including OPERS’ assets—not for the benefit of OPERS, but for their own ideological objectives,” Mr. Russ wrote.

Bill Pan contributed to this report.