Tax Analysts Blog

Feeling Petty About Guns? Tax Them

Posted on Sep 4, 2013

Two U.S. Congressmen, who know nothing about tax policy, have introduced a bill that will dramatically increase federal taxes on guns and ammunition. The Congressmen are Democrats Danny K. Davis from Illinois and Bill Pascrell from New Jersey. The bill cleverly called the Gun Violence Prevention and Safe Communities Act of 2013, would not prevent violence nor ensure safe communities. What it would do is impose a 20 percent tax on all firearm purchases and a 50 percent tax on ammunition. The bill would also increase transfer fees and licensing fees for gun dealers, manufacturers, and importers. Because they would like the pain to keep pace with inflation, all of the new taxes and fees would be indexed. The revenue from the bill would be set aside for law enforcement and to fund research on gun violence. I am not sure what happens if someone's research shows that increased gun ownership leads to lower crime. But researchers from Harvard found that last week.

If their public pronouncements are any indication, Davis and Pascrell hate guns and view the Constitution as a nuisance (at least that pesky Amendment Number 2). It is not surprising they are pushing this asinine position. There is no widespread support for banning more guns. There is little support for even further restricting gun purchases. If the goal is to harass gun rights supporters, the next best thing is to impose an onerous tax. This is petty politics at its finest. And it represents horrible tax policy.

Davis, Pascrell and their gun control buddies obviously don't understand some basic concepts of tax policy. They're proposing a special tax, an excise, on a particular product. Everyone who has ever studied tax policy will tell you that those taxes are warranted only in limited circumstances. The idea is that an excise is appropriate when it's used to compensate society for the external costs of using a product. In basic tax school, we call those costs externalities. Say I live in rural Virginia, far from any high-crime area. I own a .22 rifle because I like to shoot empty beer cans. And maybe I own a .45 automatic in the unlikely event of a home invasion. I've never committed a crime. And let's stipulate that I'll never commit a crime because most gun owners never will. And I don't hunt because I'm a vegetarian and don't like to shoot critters.

Exactly what externalities am I responsible for? Neither I, nor my firearms, nor my ammunition has ever been to a high-crime area. If I'm not causing harm (and my inanimate pistol and bullets aren't causing harm), what's the rationale for the tax? It's not externalities. The rationale is that Davis and Pascrell don't like guns. They probably don't like gun owners, hunters, preppers, and guys with the Second Amendment tattooed on their forearms. But the truth is they want to impose a tax where none is warranted. Davis and Pascrell want to tax law abiding gun owners (who constitute about 99 percent of gun owners) because of the actions of violent criminals. There are many things in life we don't like, and people we don't like. But that's not a reason to impose a tax. I wish politicians understood that.

Read Comments (6)

bubba shawnSep 3, 2013

There is already an excise tax upon the manufacture and selling of firearms and
ammo. That money is suppose to be used to promote the shooting sports.

edmund dantesSep 5, 2013

Liberals profess to be mystified by the incredible surge in recent years of
purchases of guns and ammo. Looks like the gun owners of America were just
trying to get out in front of the tax increase!

An attorney who's been published multiple times in TN and TNISep 10, 2013

How about being honest with us, Dave? The researchers of the paper you cite
are NOT from Harvard. They merely published their article in a publication
affiliated with Harvard. That is a huge difference. Further, the Harvard J of
Law and Public Policy has a self-proclaimed bias of "conservative and
libertarian scholarship."

I saw NO evidence the article was peer-reviewed, as is the case with real
scientific papers. Until then, and until the authors make their underlying
data available to the public, the article can be given no credibility.

Look at the article's second paragraph:

"Since at least 1965, the false assertion that the United States has the
industrialized world’s highest murder rate has been an artifact of politically
motivated Soviet minimization designed to hide the true homicide rates."

"Soviet minimization"? ROFLMAO! That quote says it all!

Come on, TN, you above this garbage. Spare us, please.

David BrunoriSep 10, 2013

Dear Attorney who's been....,

While, you obviously disagree with me, I want to thank you for writing (I
suspect you are not alone in your opinion).

My main point was not the findings of the Harvard study. But since I cited it,
I should defend it a little. Like all papers in academic journals, it may
very well be flawed or even inaccurate. That it was not peered reviewed does
not necessarily make it incorrect. Most law review articles are never peer
reviewed at Harvard or anywhere else. Moreover, just because this journal has a
libertarian bent does not make the findings incorrect. Like most Harvard law
journals, it is run by 2 dozen Harvard law students. Harvard students are
pretty smart, even those who are libertarian.

This piece has gotten a lot of press and discussion. I have not seen any
methodological criticism of it -- from even the most ardent gun control
supporters. To be sure, I would not have used the term Soviet minimization. I
think they were referring to the fact the Soviets routinely lied about their
murder rates.

My point was that the proposal to further tax guns and ammunition is bad tax
policy. There are no externalities that justify further excise taxes.

An attrorney who's been etcSep 11, 2013

Thanks for the reply, David. I would make some additional points.

The article at the Harvard publication is not really a legal article. I read
it, and it acts as if it's a scientific study, claiming to rely on empirical
evidence and data. Colleagues, friends, and relatives who publish such studies
in professional and scientific journals tell me that those publications are
rarely edited by students. They are edited by faculty or researchers with
graduate degrees who work in the field, or by professional editors. They send
the paper out for peer review to professionals working in the field. These are
almost always faculty members at graduate schools or departments, or
researchers with post-graduate degrees working in the field. They in turn
check the quantitative analysis to make sure that it is mathematically and
statistically valid, and that the author has correctly analyzed the underlying
data. Most of them have taken graduate-level courses in mathematics or
statistics (usually the later). The process can be quite rigorous.

I doubt the law students at Harvard are qualified to do this. They may be
quite bright, and well-qualified to spell check a legal article, or make sure
the correct footnote format is used. But the article you cite goes far beyond
mere legal analysis, and into the realm of quantitative analysis of empirical
data. Someone who regularly publishes such articles in peer-reviewed journals
described a non-peer reviewed paper edited by students as a "weak citation."

As for externalities, if the data indicates a conclusion contrary to the
Harvard paper, might that not be a case for increasing excise taxes on guns and
ammo? Davis and Prascell would be vindicated. And even if not, if the tax is
easy to collect and the costs of collection are less than the revenue raised,
why not do it?

And what about the externalities of those living in urban areas? Are theirs
subservient to externalities of rural citizens? An increase in such taxes may
inconvenience one living in rural Virginia who shoots empty beer. But it may
be a matter of life and death for one living in Washington, DC. Absent strong
evidence that "more guns means less crime," I say go for it.

David BrunoriSep 11, 2013

Dear attorney who...,

Yes, if there are externalities taxes should be levied. But for the vast
majority of gun owners, there are no societal costs. It's not like smoking or
pollution -- where the harm is universal. By the way, thanks for a very good
conversation.

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