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Posts Tagged ‘gun control’

Gun Sales Increase in the Face of Pending Federal Gun Laws?

September 23rd, 2013 No comments

By: Emily Lorenzo

Blog Category: The Economics of Gun Control

The Firearms and Ammunition Excise Tax (FAET), Chapter 32 of the Internal Revenue Code (26 U.S.C. 4181), imposes 10-11% of the sale price of firearms and ammunition by manufacturers, producers, and importers. The Treasury Department’s Alcohol and Tobacco Tax and Trade Bureau (TTB) report recorded the highest increase in gun sales from 2009 to 2010, an increase of 45%. Could this increase in firearms purchases be attributed to general anticipation of the Obama-driven federal gun control policies? Perhaps not. The TTB reported a 5% decrease in the tax amount collected by the FAET from 2010 to 2011. However, the FAET excludes organizations that manufacture, produce, or import less than fifty guns per year. The 2012-13 federal gun control legislation may change this trend once again, increasing the sales of firearms and ammunition. Will we see a drastic increase similar to the increase from 2009 to 2010, or will the total tax revenue generated by FAET continue to fall?

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.  

Source:

Firearms Excise FAQS – Tax Rates and Statistics, Alcohol and Tobacco Tax and Trade Bureau, available at http://www.ttb.gov/firearms/faet-faqs.shtml#tax_rate.

Up In Arms

August 30th, 2013 No comments

By: Robert Gorkin

Blog Category: The Economics of Gun Control

The recent tragic killing of elementary school children in Newtown, Connecticut sparked an immediate, emotionally-charged national debate to heavily restrict or even disallow gun ownership by private citizens.  Proposals to enact gun-control legislation have predictably run into stiff Second Amendment opposition.  States with restrictive laws include New York, California, Illinois, and Hawaii. As some states have attempted to ratchet up gun controls, gun manufactures and retailers have struck back in an interesting twist to the “law of unintended consequences.”

A growing number of gun manufactures have issued policy directives cancelling current business and rejecting any future business from military and law enforcement agencies in anti-Second Amendment states.  Within several weeks, the list grew from a handful to more than sixty companies. For example, one Colorado company ran ads warning that it could be forced to leave the state, resulting in a loss of jobs. In Maryland, a potentially serious economic loss could come from Beretta U.S.A. This threat is not idle. In the past, when Maryland increased its gun-control restrictions, Beretta moved its warehousing to Virginia. At one point the company was the second-largest employer in southern Maryland and indirectly provided even more Maryland jobs through its contracts. Today, in addition to making a number of other weapons, Beretta manufactures the standard sidearm for the U.S. military and remains a major economic player in Maryland’s economy. Beretta warned that a proposed assault-weapons ban could force the company to leave the state.

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.

Sources:

Mike Opelka, Update: The Latest Complete List Of Gun Makers & Sellers Saying ‘No!’ To Law Enforcement In Anti-2nd Amendment StatesThe Blaze (Feb. 24, 2013, 10:15 AM), available at  http://www.theblaze.com/stories/2013/02/24/update-the-latest-complete-list-of-gun-makers-sellers-saying-no-to-law-enforcement-in-anti-2nd-amendment-states.

Erica Ritz, ‘Berettas Don’t Bluff’: Major Gun Company Threatens To Leave Maryland Over New Gun Control Proposals, The Blaze (Feb. 24, 2013 7:07 PM), available at http://www.theblaze.com/stories/2013/02/24/berettas-dont-bluff-major-gun-company-threatens-to-leave-maryland-over-new-gun-control-proposals.

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Pension funds sell holdings tied to gun manufacturers

June 10th, 2013 No comments

By: Jamilah Espinosa

Blog Category: The Economics of Gun Control

Pension funds sell holdings tied to gun manufacturers

Following the tragedy in Newtown, Connecticut where twenty children and six adults were killed by a gunman at an elementary school, the debate on gun control increased. [1] Amid the debate, it was discovered that many U.S. teacher and public employee retirement funds had investments in gun manufacturers. [2] In response to the tragedy and debate, the California State Teachers’ Retirement System (CalSTRS), which is the second-biggest in the United States,  sold it’s stocks that were invested in gun manufacturing companies. [3] In January 2013, the CalSTRS sold $2.9 million of Smith and Wesson Holding Corporation and Sturm, Ruger, and Co. stocks that it held. [4] The New York City Teachers’ Retirement System, one of the largest pension funds in the country, followed suit in February 2013, and sold $13.5 million in investments it had in five manufacturing gun companies. [5] The New York City Teachers’ Retirement System attributed the decision to the school shooting in Newtown, CT. [6]

Conversely, the New York City Police Pension decided this March not to sell the approximate $10 million in investments it has in gun-related holdings. [7] The President of the Patrolmen’s Benevolent Association explained that the pension board had not found that the gun manufacturers had done anything improper regarding the Newtown tragedy and ultimately the primary responsibility of the board is to make reliable investments. [8] It is likely that the New York City Police Pension stood firm in retaining their gun-related holdings because of the financial success of the stocks. The New York City Teachers’ Retirement System sold its holdings, but kept the profits from the record gun sales of the last two years. [9] The sale of the gun-related holdings will have significant financial impacts on the pension funds, for example if the New York Teachers’ Retirement System purchased stocks of Smith and Wesson two years ago, the return on the investment would have been 200 percent. [10] It is still questionable whether other pension and mutual funds will follow suit in divesting their gun-related holdings.

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.

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[1] Hilary Russ, NYC teacher pension fund pulls money from gun makers, Feb. 15, 2013, available at http://www.reuters.com/article/2013/02/15/us-usa-guns-nyc-pension-idUSBRE91E0QV20130215.

[2] Id.

[3] Martin Z. Braun, New York City’s Police Pension Fund Won’t Sell Gun Holdings, Bloomberg, Mar. 7, 2013, available at http://www.bloomberg.com/news/2013-03-06/new-york-city-s-police-pension-fund-won-t-divest-gun-holdings.html.

[4] Id.

[5]  Russ, supra note 1.

[6] Id.

[7] Martin, supra note 3.

[8] Id.

[9] Michal Conger, NYC teacher pension fund sells stock in gun makers, but keeps the profits, The Examiner, Feb. 15, 2013, available at http://washingtonexaminer.com/nyc-teacher-pension-fund-sells-stock-in-gun-makers-but-keeps-the-profits/article/2521700.

[10] Id.

 

 

 

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How much are you willing to pay in exchange for gun law reformation?

May 20th, 2013 No comments

By: *Jaclyn Crittenden

Blog Topic: The Economics of Gun Control

How much are you willing to pay in exchange for gun law reformation?

While there are many ways to change gun control laws, I will summarize one of the proposal, that every gun purchaser has gun insurance.[1]  The problem with this method is that just like any other kind of insurance, compliance is unenforceable because it can easily be cancelled or may lapse right after the sale.

Additionally, without people having insurance, this will mean that fewer guns will be sold. As a result, this will cause prices and sales taxes to increase for guns, licenses, ammunition, magazines, and other accessories. Potential excessive rates and taxes would eventually make it so only wealthy people could afford guns.[2]  Wealthy people are generally law-abiding citizens as they have assets that can be seized and paychecks that can be garnished.

The legal firearm market would be negatively affected by increases in costs because it creates more demand for the illegal black-market, straw purchases, and gun thefts.[3]  For example, judgment proof felons convicted of gun-related crimes can illegally buy guns at a lower price, thus gaining access to firearms while avoiding insurance requirements and the related sales tax.[4]

Middle-class, law-abiding, tax-paying citizens end up bearing an average of $100 billion for every gun purchase under this proposed provision; I agree that something must be done, however, not by means that will financially burden the majority of citizens. That is just not the way to do it![5]

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.

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*Jaclyn Crittenden is a staff member on the Widener Journal of Law, Economics & Race. To learn more about Jaclyn, click here to visit her page.

[1]http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/28/the-economics-of-gun-control/

[2]http://www.thedailybeast.com/articles/2012/12/28/should-people-be-forced-to-buy-liability-insurance-for-their-guns.html

[3]Shapiro RJ, Hassett KA, The Economic Benefits of Reducing Violent Crime: A case Study of 8 American Cities, Center for American Progress, Washington, DC, June 2012

[4]Supra note 2.

[5]Supra note 3.

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Liability Insurance for gun purchases

May 20th, 2013 No comments

By: Candace Embry

Blog Category: The Economics of Gun Control

Liability Insurance for gun purchases

With the latest gun-related tragedy in Newtown, CT, gun control has resurfaced as a topic of conversation and many Americans are ripe for change. Now that gun violence has affected our budding youth, “there is a moral price to be paid for inaction.”[1]  So, let’s get to work America!

John Wasik of Forbes magazine describes President Obama’s solutions of banning assault weapons, multiple-ammo clips, and gun-show sales as “low-hanging fruit approaches.”[2]  The President also proposed increased funding for law enforcement and providing easier access to mental health care.[3]  Will any of these really work? John Wasick says, “No.”

Instead, Wasik suggests an approach focused on forcing gun owners and sellers to take on the financial burden that gun-ownership poses to all Americans. Wasik argues that gun owners should bear the associated risks and costs through the mandated purchase of liability insurance.[4]  Gun violence is harmful not only to one’s physical well being, but also to our economy. When a household acquires a gun, the imposed costs on society are between $100 and $1,800 per year.[5]  However, the impact in the aggregate is actually much greater. The Johns Hopkins Center for Gun Policy and Research reported that gun violence impacts quality of life, emotional trauma, and even property values.[6]  Considering these broader effects, gun violence resulted in a $100 billion cost to society in 1998.[7]  These are the costs for which gun owners and sellers should be held liable.

Wasik’s plan would work much like car, homeowners, or health insurance plans requiring gun owners to shop for and secure a liability insurance policy prior to even making the purchase. Rates would be determined by actuaries’ calculations of risk based on factors like age, residency, history of mental illness, and the type of gun. Those most at risk to commit a gun crime would be quoted higher rates, and, ideally, this will create an economic disincentive and make gun-ownership too expensive for those who pose the greatest risks to society. This is not the first time the idea has come up. In fact, a similar law was proposed in the Illinois legislature in 2009, but it was quickly defeated.[8]

While insurance is not a solution to all problems presented by gun violence in America, if combined with the President’s suggested changes, mandatory insurance policies could actually fund greater protections to prevent more tragedies like the one in Newtown, CT. Most importantly, Wasik posits this plan would likely survive a second amendment challenge.

So, what’s the verdict? Will we sacrifice morality for another round of inaction? Or will we challenge gun owners to put their money where their guns are?

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.
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*Candace Embry is the 2013-2014 Articles Editor (DE) on the Widener Journal of Law, Economics & Race Journal. To learn more about Candace, click here to visit her page.
[1] John Christoffersen, Joe Biden: Gun Control Views Have Changed Since Newtown, HUFFINGTON POST (Feb. 21, 2013, 6:48 PM), http://www.huffingtonpost.com/2013/02/21/joe-biden-gun-control_n_2735716.html.
[2] John Wasik, Newtown’s New Reality: Using Liability Insurance to Reduce Gun Deaths, FORBES (Dec. 17, 2012, 7:34 PM), http://www.forbes.com/sites/johnwasik/2012/12/17/newtowns-new-reality-using-liability-insurance-to-reduce-gun-deaths.
[3] Now is the Time to do Something about Gun Violence, THE WHITE HOUSE, http://www.whitehouse.gov/issues/preventing-gun-violence#what-we-can-do.
[4] Wasik, supra note 2.
[5] Brad Plumer, The Economics of Gun Control, THE WASHINGTON POST (Dec. 28, 2012), http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/28/the-economics-of-gun-controlSee generally Philip Cook & Jens Ludwig, The Social Costs of Gun Ownership, 90 JOURNAL OF PUB. ECON. 379-91 (2006) available at http://home.uchicago.edu/~ludwigj/papers/JPubE_guns_2006FINAL.pdf.
[6] The Case for Gun Policy Reforms in America, JOHNS HOPKINS CENTER FOR GUN POLICY AND RESEARCH (Oct. 2012), http://www.jhsph.edu/research/centers-and-institutes/johns-hopkins-center-for-gun-policy-and-research/publications/WhitePaper102512_CGPR.pdf
[7] Id.
[8] Wasik, supra note 2.

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All I want to do is bang, bang, bang, bang, and kkaaa ching and take your money!

May 6th, 2013 No comments

By: Brittany McCants

Blog Topic: The Economics of Gun Control

All I want to do is bang, bang, bang, bang, and kkaaa ching and take your money![1]

Given the recent catastrophes involving gun violence much consideration has been given on how to prevent, or at least significantly decrease the chances of similar events occurring again.[2]  When brainstorming suggestions on how to control gun violence, suggestion range from imposing higher taxes on guns and bullets, doing risk assessments on those who purchase guns to requiring those who purchase guns to purchase insurance that could cover any subsequent incidents.[3]

There are various subjects included when you consider the phrase the economics of gun control. Of course consideration is given to the actual costs that will incur in regards to putting forth any type of gun control plan. With all of these task forces and methods proposed to prevent the horror of having another life loss due to senseless gun violence, the idea of where the funding for these ideas can, at times, get pushed to the back of the mind.

Sure we can think of a million ways to control gun violence and if we as a country are fortunate enough to come to an agreement regarding how these controls will be implemented the possible benefits become tangible. What is also important to consider when thinking of economics and gun control is the effect that pulling or putting money towards gun control will have in other areas of this country.

For example money that could possibly be spent on tasks forces for developing jobs, giving aid to families in need, or bettering local schools has the chance to be diverted elsewhere when gun control takes center stage. Of course, arguments can be made that gun violence can effect each of the above named categories of life, but only the best torts professor will allow you to take your “but” arguments so far. Since their victims span larger numbers than initially expected, one question remains, are gun wielding killers who create pubic fear with their spurts of unexpected violence winning in more ways than were imagined?

The opinions expressed herein are strictly those of the author and do not necessarily reflect the opinions of the Widener Journal of Law, Economics & Race.

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*Brittany McCants is a staff member on the Widener Journal of Law, Economics & Race. To Learn more about Brittany, click here to visit her page.

[1] M.I.A , Paper Planes, XL Interscope Records (Feb. 11, 2008).

[2] Brand Plumer, The Economics f Gun Control. Dec. 28, 2012. http://www.washingtonpost.com/blogs/wonkblog/wp/2012/12/28/the-economics-of-gun-control/

[3] John Wasik, Newton’s New Reality: Using Liability Insurance to Reduce Gun Deaths. Dec. 12, 2012. http://www.forbes.com/sites/johnwasik/2012/12/17/newtowns-new-reality-using-liability-insurance-to-reduce-gun-deaths/1/.

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