Tax Analysts Blog

Why Exactly Are We Taxing Guns?

Posted on Aug 26, 2015

Earlier this month, the Seattle City Council enacted an unusual excise tax on guns and ammunition. I say unusual because attempts to regulate firearms through taxation are usually taken up by the federal or state governments. The Seattle council passed a measure that imposes a $25 tax on firearms and a 5-cent-per-round tax on ammunition. Those are pretty steep levies. A back-of-the-envelope calculation shows they will result in about an 8 percent tax on the average firearm and a 20 to 30 percent tax on ammunition. Before I go into all the reasons why these are absurdly bad taxes, I will admit that I am a gun guy. I like to shoot. I own guns. I have taught my children to shoot. But I don't consider myself a gun nut, and I support reasonable restrictions on firearm access. I do believe it is my right to own a gun -- and I shouldn't have to explain why I want one.

Sound tax policy dictates a broad base and low rates. So firearms and ammunition should be subject to sales taxes. Sound tax policy also dictates that excises -- special taxes on certain products -- be used sparingly, and only to pay for externalities. Externalities -- for those politicians who obviously have forgotten -- are the costs to society from using a product as intended that are not borne by the marketplace. If you smoke, you get sick; the public pays for your healthcare, and an excise is justified.

So why are we taxing guns and ammunition? I do not and will not minimize the tragedy of gun violence. We have plenty of horrific crimes linked to firearms in the United States. But I fail to see how some terrorist, kook, or criminal using a gun has anything to do with externalities. The vast majority of guns in this country will never be used in a violent crime or suicide. The vast majority of gun owners will never use their firearms in an inappropriate manner. That is a fact. Think about gun owners you may know (I find that most strident anti-gunners know no gun owners). I shoot targets at a range. I know a lot of guys who hunt for deer and small game. I know several small business owners who carry weapons for protection. I know a man who abhors hunting because he is a vegetarian, but he recently purchased a new shotgun because he enjoys skeet shooting. What are the externalities created by these situations? There are none.

Seattle City Council President Tim Burgess (D) calls the measure a "gun violence tax." For the millions of responsible firearm owners, that must seem a strange characterization.

I would like to think the Seattle council members are well meaning. They want to reduce gun violence. (Although I suspect some of them would like to just get rid of all guns because they dislike guns and gun owners.) Whatever the motivation, these taxes will have zero effect on gun violence in Seattle. People who want to perpetuate violence in the city will not be deterred by them. It is asinine to believe the tax code will prevent horrible events like Sandy Hook, Columbine, or Aurora.

The taxes also illustrate one of the great problems with local taxation of mobile bases. The Seattle City Council expects the city to raise up to $800,000 a year from these taxes. The money will be used for "gun-violence-prevention research and programs." But when cities impose special taxes on particular products, they never raise as much money as they expect. Seattle residents wanting to purchase a firearm or ammunition will go outside the city limits. Fewer guns will be sold in the city. More will be sold in the suburbs. It may lead to fewer gun purchases by law-abiding citizens. It will have no effect on crime.

Like many politicians, the council members probably believed they needed to do something about gun violence. But this is the wrong approach. The tax laws should be used to raise revenue, not to make political statements.

Read Comments (2)

edmund dantesAug 25, 2015

"I would like to think the Seattle council members are well meaning."

That's the only flaw in your analysis. Politicians are not, have never been,
will never be "well meaning." Politicians want power, they want to exercise
control over their citizens, in large and small ways. That is all that they

The Seattle council members enacted this tax because they could do so without
fear of consequences from the voters. Seattle voters will not think the issue
through, as you have. Whenever a politician can raise taxes, he will do so.

Great post.

Guy NeversAug 26, 2015

Like you, I like and respect firearms, and, with three children want to see
reasonable restrictions on firearms. If those who do own firearms were to
properly register them, I think taxes like this would be unnecessary, because
the firearms would be traceable. Unfortunately many do not register their
firearms and they create a greater risk than is necessary. Perhaps this is
Seattle's way of addressing this lack of registration.

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