As you may know, Councilman Tim Burgess is proposing a $25 tax per gun on firearms sales and transfers (excluding person-to-person sales) in the city of Seattle, and $0.05 tax per round on ammunition bought in Seattle. This is why this proposal is a really bad idea . . .
First, the basic arithmetic behind the proponents’ numbers is grossly unsound. The supporters of the proposal claim that it will generate $300,000-$500,000 in revenue that will be used to treat the victims of “gun violence.” These projections have absolutely no basis in reality.
Here are the very real number from Precise Shooter for the first half of FY2015:
Local firearms sales, which would be subject to $25 tax: 612 guns – total expected tax: $17,925
Total number of ammunition rounds sold: 115,160 – total expected tax @ $0.05 per round: $5,758
Assuming my store is roughly half of Seattle’s business, multiply this by four and you get the more realistic total for the year: $95,000
But this, of course, assumes that people just tighten their belts and hand over the money. There is absolutely no reason for them to do so. Seattle has two dedicated gun stores, a couple of pawn shows that dabble in firearms, and a couple of box stores that sell a few firearms.
However, just outside Seattle (within 1-3 miles from the city limits) there are plenty more:
Great American Guns
West Coast Armory
Discount Gun Sales
…and even more if you go a little bit farther to the North or South.
So there is absolutely no reason for consumers to shop in Seattle, where prices will always be significantly higher, for their gun needs. There are tons of options just outside the city.
Perhaps we could just pay the bill ourselves to keep the prices competitive?
Our store is run very efficiently. It has only two employees, and a state-of-the-art software system which tracks all the merchandise, connects to NICS for background checks, and efficiently handles all the paperwork. I wrote it myself and I am extremely proud of it.
Yet in the last six months we had gross profit of $66,000 on sales of $416,000. We earned a further $6,000 on transfer fees. We have spent $42,000 on salaries for the two employees in the store, so the net before the other operating costs for six months is $30,000. Is it reasonable to expect that we – the “firearms industry” – can afford the tax bill of $23,500 on this meager income? No. This would certainly put us under.
And, in fact, if Seattle does enact this law, Seattle gun stores would simply go out of business. My store certainly would, and I don’t think there are stores which are run more effectively than mine. Which means that not only won’t Seattle get the revenue the proponents project, it would lose the sales tax revenue that it gets from current gun sales.
During the first six months of the year, Seattle collected just over $13,000 in revenue from the sales tax collected by my store. Quadruple that and Seattle will lose just over $50,000 per year in sales tax revenue if the law is enacted. That, an a bunch of decently paying jobs (at least $15 an hour, though we pay our employees more than the city-mandated minimum).
As the proponents point out, they expect lawsuits if the law were to pass. The state of Washington has a state preemption law which prohibits municipalities from introducing more restrictive firearm regulations than already exist under the state law.
The state of Washington hereby fully occupies and preempts the entire field of firearms regulation within the boundaries of the state, including the registration, licensing, possession, purchase, sale, acquisition, transfer, discharge, and transportation of firearms, or any other element relating to firearms or parts thereof, including ammunition and reloader components. Cities, towns, and counties or other municipalities may enact only those laws and ordinances relating to firearms that are specifically authorized by state law, as in RCW 9.41.300, and are consistent with this chapter.
The proponents think that the new fees would be legal because this law concerns taxes, not regulating the firearms.
However, as we have seen above, the law makes no sense fiscally. With it in place, Seattle stands to lose money, not gain it. Which means that the law is not about generating revenue, but about regulating the firearms.
Luckily, the author of the law was not very subtle about it, declaring his intent thusly:
Asked if he thought there would still be enough firearm sales taking place in the city to fund gun violence prevention programs and research if the tax were put in place, Burgess said: “We don’t know for sure.” But the revenue is not the only reason he see’s (sic) the tax bill as important.
“Municipal governments are the incubators of change,” he said, “and, if by enacting this in Seattle, we could persuade the state of Washington to impose this kind of a tax, then that would be great progress, too.”
Does Burgess think that it’s worth getting the city of Seattle into a similar legal conflict over a tax that could yield just a few hundred thousand dollars each year? He does.
“It’s worth it because the harm being inflicted is so costly and so significant,” he said. “The scope and scale of gun violence in our country is way, way out of proportion to any other Western, industrialized nation. It’s shockingly out of proportion.”
So it is about gun regulation after all — not about money — and therefore illegal under RCW 9.41.290. The above quotes will be “exhibit one” if the taxes were to pass and we would be forced to sue.
When a firearm is recovered by the police under questionable circumstances – lost, stolen, captured at the crime scene – the FBI issues a sequence of tracing requests that eventually reach the firearms dealer who sold the gun. I have been in this business for four years now, with thousands of firearms sold – and I have only been on the receiving end of a tracing request a couple of times – less that one tenth of one percent of the firearms sold by Precise Shooter end up in the wrong hands. Yet 99.9% of the customers would be stuck with the tax should this law pass.
It gets worse when it comes to ammunition. There are two types of ammunition – sporting and self-defense. Sporting ammunition is designed for target shooting and hunting small animals. Self-defense ammunition targets people and large wild animals. It is self-defense ammunition that ends up being used in crime.
What is the difference? Self defense ammunition has a hollow point bullet which looks like this:
When this bullet strikes the target, it mushrooms and tumbles in the body to inflict maximum damage, where a regular, round nosed or flat point bullet used in sporting ammunition would just pass through.
The hollow point bullets are relatively difficult to make, so all target ammunition uses either round nosed bullet, or wad cutter bullets which produce a very nice, round, paper puncher type holes which are easy to measure.
Another type of ammunition which is used almost exclusively for target practices is 22LR. This ammunition is very inexensive ($0.05-$0.07 per round), and target shooters go through hundreds of them during a single visit to the range.
Hollow point ammunition typically costs in the vicinity of $20 per 20-25 rounds. For it, a tax of $0.05 per round would constitute a 5% increase. The target ammunition ranges from $3 per 50 rounds for 22LR (almost 100% price increase due to the proposed tax) to $10 for 50 rounds (25% increase) for typical sporting 9mm cartridge.
In the last six months we sold 115,160 rounds of ammunition, of which only 2,465 rounds were self-defense hollow points suitable for use in crime – less than 2.5% of the total. Of course, none of it was probably used in actual crimes, and instead it is sitting locked in the safes of law abiding citizens.
This means that if the tax were to pass, the vast majority of the ammunition taxes – in our case, $5,600 per six months – would be paid by sportsmen for ammunition which is unsuitable for killing, and only $120 or so in tax would be due for ammunition that could be used in crime.
I don’t think anyone would be discouraged from buying ammunition for crime use because of this – but sportsmen would be strongly affected.
So in conclusion, the proposed tax would penalize sportsmen, drive firearms sales – and the associated sales tax revenue – out of town, and will have absolutely no effect on the amount of firearms or ammunition in the city because people would simply buy it elsewhere.
This law should not pass.