Taxing Guns

Policymakers across the nation have recently adopted new taxes on guns. As expected, these policies are controversial. Supporters believe the taxes will increase the cost of weapons, decrease sales, and provide the revenue necessary to fund the costs of gun violence across America. Critics, by contrast, argue the taxes are nothing more than poll taxes and will drive the market for weapons underground.

Lost in the debate is the fact that gun taxes have been on the books for over a century. Congress adopted the first of such taxes during World War I to address the nation’s extraordinary wartime revenue needs. Since then, policymakers at every level of government have added more taxes, creating a capacious system of modern gun taxation in the process.

Despite the significance of guns in America and the increasing role that taxes play, no study has systematically analyzed the underlying reasons for and against the laws or, more importantly, offered a detailed framework for recognizing the rights and responsibilities of gun ownership. In this Article, we begin to fill this surprising gap in the extant literature. We review three theories of public finance and find that all provide useful ideas for improving our system of firearm taxation. We argue that one approach, however, provides the best framework for shaping gun tax policy in the future: the Pigouvian theory of taxation. We explain how and why legislators should pursue Pigouvian taxation, and we outline policies for improving the nation’s approach to taxing guns.

* Thomas Griffith is the John B. Milliken Professor Emeritus of Law and Taxation at the University of Southern California Gould School of Law.

† Nancy Staudt is currently serving as the vice president of innovation at the RAND Corporation and the Frank & Marica Carlucci Dean at the Pardee RAND Graduate School. The views, opinions, findings, conclusions, and recommendations contained herein are the author’s alone and not those of RAND, the Pardee RAND Graduate School, or its research sponsors, clients, or grantors. We would like to thank Lee Epstein, Mitu Gulati, Kim Krawiec, and participants in many workshops, including at Duke Law School, Florida International University College of Law, Missouri State University, and Washington University School of Law, for helpful comments and suggestions. We also thank Tara Katelyn for her excellent research assistance and Sara Hubaishi for her excellent “Bluebooking” skills.

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