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September 22, 2019

8/17/2019 7:30:00 AM
Lawmakers propose gun tax to compensate gun violence victims
Critics warn of unintended consequences

Richard Moore
Investigative Reporter

Two state Democratic lawmakers are introducing legislation to impose a state tax on firearm manufacturers which would be used to create a fund for victims of gun violence, the lawmakers announced this past week.

State Rep. Jimmy Anderson (D-Fitchburg) and Sen. Lena Taylor (D-Milwaukee) would enact a state tax of 0.5% of the manufacturer's list price for each firearm sold in the state. The lawmakers said the bill is necessary in the wake of mass shootings in Dayton, Ohio, and El Paso, Texas, that left at least 31 people dead and more than 50 wounded.

The taxes would be used to establish a fund within the Department of Justice to aid victims with costs related to an incidence of gun violence.

"The tragic shootings this weekend is a harsh reminder that our government is not only failing to protect its citizens, it is failing the victims in the aftermath of these horrific events," Anderson said. "We cannot sit idly by while innocent people suffer."

Anderson said the unfortunate reality is that victims of gun violence have no legal recourse.

"In 2005, the NRA pushed Congress to make gun manufacturers free of liability for gun deaths, an unprecedented protection not provided to any other industry in America," he said. "As a result, victims of gun violence are unable to seek damages from gun manufacturers. This places incredible financial burdens on victims and their families, many of whom face exorbitant medical bills and other unforeseen expenses."

Crime victim funds exist in all 50 states to help families get their lives back on track after tragedies, and there is no excuse to exclude victims of gun violence, Anderson said.

"It makes me sick to see gun manufacturers getting off scot-free as gun violence continues to plague families across the country," he said. "We must hold these companies responsible for the needless violence their industry produces."

The proposed legislation will almost certainly die in the Legislature, and Assembly speaker Robin Vos (R-Rochester) signaled as much on Twitter when he announced that Gov. Tony Evers had reached out to him for their first meeting in months.

"I will not entertain proposals to take away Second Amendment rights or due process," Vos tweeted on Aug. 6 about the meeting. "Hopefully, we can find common ground on the real problem by addressing the mental health issues facing Wisconsin."

Growing popularity, but wait

The idea of gun taxes - with the use of the new revenue to be spent in various ways, in addition to compensation for victims - is growing in popularity around the country.

The latest politician to embrace the proposal is U.S. Sen. Elizabeth Warren of Massachusetts, a leading Democratic presidential candidate. Specifically, Warren's plan would boost the excise tax on handguns to 30% from 10% and on ammunition to 50% from 11%.

The federal government has collected excise taxes on manufacturers and importers of guns and ammunition since 1919, Warren says, but the revenue those taxes produce are insignificant when compared with other excise taxes.

"These taxes raise less in revenue than the federal excise tax on cigarettes, domestic wine, or even airline tickets," Warren said in announcing her new proposal. "It's time for Congress to raise those rates - to 30% on guns and 50% on ammunition - both to reduce new gun and ammunition sales overall and to bring in new federal revenue that we can use for gun violence prevention and enforcement of existing gun laws."

Gun-rights advocates aren't buying it.

"This is a tax increase on protecting your family, your home," Grover Norquist, president of Americans for Tax Reform, said of Warren's proposal. "The power to tax is the power to control. If Elizabeth Warren suggested such a tax on newspapers, it would be understood as unconstitutional."

Over at the Tax Policy Center of the moderate Brookings Institute and Urban Institute, Robert McClelland wrote that gun and ammunition taxes sounded good, but they would create problems.

"Raising taxes to reduce demand for products causing external harms is a well-known concept among economists," McClelland wrote. "When it comes to guns, raising the tax price might reduce the purchase of firearms."

There was a big 'but,' McClelland wrote.

"But it also may encourage some gun purchasers to avoid background checks and create a windfall for existing gun owners," he wrote.

The federal government already imposes about $750 million in excise taxes on the import and retail sale of guns and ammunition, McClelland continued. And right now, he wrote, very little is known about how gun purchasers respond to excise taxes.

"A recent RAND study found that hunters are not responsive to price changes in the form of higher license fees," he wrote. "If all gun purchasers are like those hunters, raising taxes will have little or no effect on gun sales."

But, McClelland asked, what if gun purchasers do respond to tax increases?

"That could have the perverse effect of discouraging the use of background checks," he wrote. "Because private gun sales are exempt from the excise tax, current gun owners can sell firearms for less than retail stores that must pay the tax. And increasing the excise tax would only widen that price difference."

In states which do not require background checks for private sales, McClelland continued, the new levy could act as an effective tax increase on background checks, strengthening the incentive for gun purchasers to avoid them.

Not only that, McClelland contended, but taxing ammunition would probably have little effect on gun violence.

"It might dissuade a few people who are ambivalent about purchasing a gun," he wrote. "And since some of them might misuse the weapon, it could reduce gun violence slightly. But the tax would fall most heavily on high-volume users such as target shooters rather than those who purchase a gun and a small number of cartridges."

The bottom line?

"A gun and ammunition excise tax may sound attractive to those who want to limit gun ownership," he wrote. "And the idea of using taxes to correct externalities (including the medical and other societal costs of gun violence) is appealing to economists. But such taxes need to be effective. And, unfortunately, proposals to raise gun-and-ammo taxes may fail that test."

Richard Moore is the author of the forthcoming "Storyfinding: From the Journey to the Story" and can be reached at

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