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Gun tax proposals proliferating

By Kay Bell · Bankrate.com
Tuesday, March 12, 2013
Posted: 4 pm ET

Using tax policy to shape individual actions and attitudes is not new.

On the carrot side, Uncle Sam encourages homeownership by offering a variety of federal tax breaks. Politicians show their support for families via the child tax credit and child and dependent care credit.

Governments also wield sticks by taxing behaviors deemed inappropriate or unhealthy.

We have tobacco taxes to discourage smoking. Higher fuel taxes prompt purchase of more fuel-efficient and environmentally friendly autos. Tanning, cited as a contributor to skin cancer, is now taxed to help pay for part of the national health care reform law. And taxes on fatty foods and sugary beverages continue to pop up in legislatures nationwide.

Now weapons have been added to the so-called sin tax list.

Chicago-area lawmakers, who've watched the number of gun deaths in their city and surrounding suburbs skyrocket, agreed last fall to a "violence tax." This $25 tax on every gun purchased in Cook County (gun sales already are prohibited in Chicago) is supposed to offset health care and other costs of gun violence.

The Chicago-area action was controversial when it was passed in November 2012. Then a month later, the tragedy at Sandy Hook Elementary School in Newtown, Conn., occurred. The shooting of 20 first-graders and six school employees has spurred a rash of gun-tax bills at the federal and lower government levels.

Rep. Linda Sanchez, D-Calif., has introduced a bill that would impose a federal 10 percent tax on "any concealable" firearm. Revenue raised by H.R. 793, known as the Firearm Safety and Buyback Grant Act of 2013, would help fund a national gun buyback program. The bill has 23 cosponsors and is pending in both the House Ways and Means and Judiciary committees.

On the state level, legislation that would impose taxes on guns or bullets has been introduced in California, Maryland, Massachusetts, Nevada, New Jersey and Washington state.

Sin tax self-righteousness?

Will the horror of Sandy Hook last long enough for these measures to make it through the arduous legislative process? Will gun lobbyists be able to sway enough lawmakers and voters to their side to prevent these and other bills targeting weaponry?

And are such taxes even effective in achieving the behavioral changes for which they were designed? Sort of.

Sin taxes tend to work only when they are substantial. Antismoking groups say that the higher cost of a pack of cigarettes, thanks to added taxes, is a main reason why smoking has declined among young people. With limited discretionary income, many youths have opted to spend their meager earnings on things other than cancer sticks.

Smokers who can afford it grumble about the added cost, but continue to buy the higher taxed product.

Still, sin taxes will continue.

Beyond the revenue possibilities and the hope that bad behavior might be changed, such levies provide us with a sense of punishing people for doing something we think they shouldn't.

Remember, though, such self-righteousness is all well and good until the bad act being taxed is your favorite vice.

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Veteran contributing editor Kay Bell is the author of the book "The Truth About Paying Fewer Taxes" and a co-author of the e-book "Future Millionaires' Guidebook."

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22 Comments
American Dandy
April 10, 2013 at 7:47 am

Criminals either steal or acquire guns on the black market. How do you tax that? Like everything to date, this measure is merely a "feel-good" white-washing of the issue. Criminals don't care what laws or taxes are put in place; Homey don't play dat game.

Why continue down the path of just penalizing honest, law-abiding citizens? Enforce the laws already on the books by fixing the justice system. It's broke, dude!

czdsp
April 09, 2013 at 1:06 pm

In what sense is self-defense or the defense of the free state a vice?