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- Category: Tax Law
In response to two recent mass shootings, Representative Don Beyer (D-VA) introduced a bill that would impose a 1,000 percent excise tax on certain guns. The Washington Post reports that Beyer hopes to include it in a larger budget reconciliation bill, which would allow it to pass the Senate with a simple majority.
The bill would raise prices not just for taxed guns, but similar guns that are exempt from the new tax as people seek to purchase those guns instead. But, while Beyer’s tax may limit access to certain types of weapons, it also appears to include loopholes that may defeat its purpose.
The tax would be paid by producers or importers of several types of guns, including semiautomatic pistols with threaded barrels (which can be used to attach silencers) and semiautomatic shotguns. Significantly, it would also apply to “semiautomatic assault weapons,” which would include semiautomatic rifles with a removable magazine and any of the following features: a pistol grip; a forward grip; a folding, adjustable or removable stock; a grenade launcher; a barrel shroud; or a threaded barrel. The bill does not specify any particular model of gun, such as an AR-15.
Although the tax is much, much higher than the existing 11 percent levy on rifles, it is similar in size to the tax imposed by the National Firearms Act of 1934. That law was passed in response to widespread gun violence of the day, such as the Saint Valentine’s Day Massacre, a mass shooting that left seven dead, and the attempted assassination of president-elect Franklin Roosevelt.
It required owners to register several types of weapons, including machine guns, and imposed a $200 tax on the transfer of these weapons. That is equivalent to nearly $4,400 today, which is the tax Beyer would impose on guns with wholesale prices of $440, and The Washington Post reports that AR-15-style weapons range in price from around $500 to more than $2,000.
But Beyer’s plan probably would not just raise prices on guns subject to the tax. It also would drive up prices on similar guns that would be exempt from the tax, including those already held in inventory by retailers and those owned by private citizens.
That increased demand for a limited stock of guns might dramatically increase prices, putting them out of reach for both legal and criminal uses. It also would create a windfall for existing owners who choose to sell their guns.
However, those price hikes might be limited because there is a large after-market for parts and accessories, which would allow someone to purchase a featureless—and untaxed— semi-automatic rifle and add features afterwards. In addition, others might be willing to purchase a featureless rifle and use it unmodified. Both of those types of purchases would probably cause the prices of featureless rifles to also increase.
Recent tragedies have revived interest reducing gun violence. Beyer’s heavy tax on certain types of guns is similar in approach to historical taxes and might reduce gun violence by raising prices for weapons not directly taxed as well. But, by focusing on taxing features that can be added after purchase (or not added at all) it may do little to reduce mass shootings.