Time for a New Look at the Distribution of the Excise Tax on Guns and Ammunition

By Peter Muller

The federal government has a number of “excise taxes” that are imposed on users of certain products either directly, at the point of sale or use, or indirectly, at the point of manufacture or import. The distribution of the funds gathered by federal excise varies but can, in many cases, be placed in one of two categories

1) To help maintain or improve the conditions for the activity that uses the taxed product– such as the federal tax on gasoline which is used to build and maintain federal highways.

2) To compensate individuals injured by the activity that uses or creates the taxed product– such as the Vaccine Injury Compensation Tax which is a per-dose tax imposed on the sale of commonly prescribed vaccines. The revenue is collected into a trust fund used to finance a no-fault federal insurance system. The insurance was created to compensate individuals injured by the use of these vaccines, also the Black Lung Disability Trust Fund Excise Tax: This excise tax applies to the sale of coal from producers. The revenue is collected into a trust fund and is used to finance the payment of black-lung benefits to injured miners.

We can, for purposes of this discussion classify the first type of excise tax as “positive” — we believe the taxed activity and the sale of product associated with it is to be encouraged and its expansion and improvement subsidized by a tax on the products associated with the activity.

The second type is a negative in which we tax the activity or products associated with the activity because we believe that the activity is injurious to some people and there should be a way be compensate the victims for injuries sustained without imposing a burdensome legal process on them.

We should also realize that over time an activity can change from meriting encouragement from our society-at-large to needing discouragement. Perhaps at some point we should stop building more federal highways and shift the gasoline tax to building better public transportation and discouraging driving.

The encouraging or discouraging of an activity via a federal excise tax is not cast in stone but should be revisited and reformed to be in sync with the current needs and standards of society.

The use of the excise tax from firearms and ammunition became a dedicated fund under the Pittman-Robertson Act in 1937 which mandated that the fund be used only to promote shooting and hunting (which was euphemistically called “wildlife conservation”). Whether that was the proper decision at the time – is a theme for historians to consider. Let us instead consider the diversion of these funds away from compensating the victims for injuries sustained from the use of firearms and ammunition.

It is hard to find reliable, trustworthy statistics after 2010.

In a study by the Law Center to Prevent Gun Violence we find the following report for 2010 in the US.

From Law Center to Prevent Gun Violence:

Homicides 11,078
Unintentional deaths due use of firearms 606
Suicides 19,392
Total 31,076

In addition to these deaths by firearms there were 73,505 people treated for non-fatal gunshot wounds in 2010.

We will characterize the 73,505 injured and the surviving next-of kin of the 31,076 fatalities as victims of the use of firearms. We have a total of 104,581 victims of firearms in 2010.
The monies derived from firearms and ammunition that went into the dedicated Pittman-Robertson fund amounted to about $400,000,000 in 2010.

Had that money been used to compensate the victims of the use of firearms – each victim would have received $4,695.

That amount will barely pay for the funeral expense of the fatalities and not even come close to paying for the hospitalization and treatment of the injured. It seems only fair, in light of the extent of injuries and fatalities that are attributable to the use of firearms that the federal excise collected be used to partially compensate the victims of firearms use instead of promoting the expansion of the use of firearms.

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