Weekly SSRN Tax Article Review And Roundup: Elkins Reviews Brunson's Paying for Gun Violence

This week, David Elkins (Netanya) reviews a new paper by Samuel D. Brunson (Loyola-Chicago), Paying for Gun Violence.

In Paying for Gun Violence, Professor Samuel Brunson notes that that although gun violence costs the United States many billions dollars annually, political and Constitutional restraints continue to prevent effective gun regulation. Against this background, he proposes a Pigouvian tax on guns, with the goal of forcing gun owners to internalize those costs. Under his proposal, the purchase of a firearm would be subject to an excise tax and the possession of a firearm would be subject to a property tax. He argues that while such a tax would not be barred by the second amendment, a federal property tax on guns would run afoul of the requirement that direct taxes be apportioned among the states in proportion to their populations. Therefore, he suggests that the tax be imposed not on the federal level but on the state level. He writes that while the tax is unlikely to result in any significant reduction of gun ownership, it will at least make society whole by compensating it for the damage cause by gun violence.

As a strong proponent of Pigouvian taxation, I was intrigued by the idea of a tax that would internalize the risks of gun ownership. It seems particularly vexing that those who object on principle to private ownership of firearms should bear its economic cost. Nevertheless, from a Pigouvian perspective – and Professor Brunson presents his proposed tax as Pigouvian – I find one aspect of the proposal problematic. Professor Brunson distinguishes among three different types of gun owners: “responsible” gun owners (“the individual who keeps her guns unloaded and locked in a safe”), “irresponsible” gun owners (“the individual who keeps her guns loaded under the bed”), and “criminal gun owners.” Although his proposed tax would not differentiate among them, he concedes that each imposes a drastically different cost on society. I agree with this assessment. Particularly relevant is the distinction between the first two categories (which are, in essence, simply two points on a continuum ranging from the extremely cautious to the extremely negligent) and the third category. The possession of a firearm always carries the risk of accidental harm (to persons or property). Quantifying the societal cost of accidental harm resulting from gun ownership and imposing that cost on gun owners would accord with Pigouvian tax theory (successfully determining the degree of caution undertaken by each gun owner and imposing tax accordingly would, of course, be ideal, but if doing so is impractical then a uniform tax on all gun owners might just be one of those compromises that we need to live with). However, it would seem that the criminal use of a gun is not a risk of gun ownership per se (any more than the use of a computer to engage in hacking or the use of a car to smuggle drugs is a risk of computer or car ownership). I have some doubt as to whether Pigouvian theory would support the imposition of tax on the owners of property to compensate society for all those instances in which property of that type is used for criminal activity. It is particularly noteworthy, as Professor Brunson points out, that those who own guns with the intention of using them in a criminal manner are, in practice, much less likely to pay the tax than are innocent gun owners

At one point, Profession Brunson concedes that “an innocent party is going to pay costs that she did not impose,” but adds that “[t]he innocent firearm owner has at least two ways to legally avoid those costs if she is unwilling to bear them, though. She can either get rid of her firearms or she can move to a jurisdiction that does not impose a firearms tax. If she is unwilling to move or part with her firearms, she has accepted that living in the jurisdiction and owning firearms is worth more to her than the cost of the tax.” The trouble with this argument is that it could be used to support a tax on just about any consumer good. For example, the legitimacy of the so-called “tampon tax” has recently been challenged in a number of jurisdictions. Would the author support a tampon tax using the same reasoning (“If she is unwilling to move or discontinue the use of tampons, she has accepted that living in the jurisdiction and using tampons is worth more to her than the cost of the tax.”)?

Summing up, I think that Professor Brunson’s idea is intriguing. Requiring gun owners to bear the risk of their behavior is eminently reasonable. It is unfair for society as a whole to pay for the harm caused by the private actions of certain individuals. Moreover, and despite his protestations to the contrary, it seems that a properly designed Pigouvain tax on guns would dissuade marginal potential gun owners for whom the advantage of gun ownership is less than the risk of accidental harm that might ensue therefrom. However, one problem in my opinion is the scope of the harm covered by his proposed tax. If the proposal were limited to quantifying the harm caused to society by the accidental use of firearms and to require gun owners to bear that cost, I believe that the proposed tax would be on much more solid Pigouvian ground.

Here’s the rest of this week’s SSRN Tax Roundup:

• Alissa Bruehne (Munich) & Deborah Schanz (Munich), Building Up a Protective Shield: The Role of Tax Communication for Corporate Tax Risk Management (2018)
• Elisa Casi (Mannheim), Christoph Spengel (Centre for European Economic Research) & Barbara Stage (Mannheim, Centre for European Economic Research), Cross-Border Tax Evasion after the Common Reporting Standard: Game Over? (2018)
• Jianlin Chen (Melbourne), Tools for Immediate Regulatory Tax Implementation: Subsidiary Legislation vs. Legislation by Press Release, 2015 Singapore J. of Legal Studies 1 (2018)
• Thomas Davidoff (British Columbia), Policy Forum: Vancouver's Property Taxes in Perspective, 66 Can. Tax J. __ (2018)
• Joachim Englisch, Digitalisation and the Future of National Tax Systems: Taxing Robots? (2018)
• Hayes Holderness (Richmond), The Case for Preempting SALT Cap Workarounds, State Tax Notes (8/20/18)
• Paul Kershaw (British Columbia), Policy Forum: A Tax Shift — The Case for Rebalancing the Tax Treatment of Earnings and Housing Wealth, 66 Can. Tax J. __ (2018)
• Kathryn Kisska-Schulze (Clemson) & Adam Epstein (Central Michigan), The Claim Game: Analyzing the Tax Implications of Student-Athlete Insurance Policy Payouts, 25 Morrad Sports L.J. __ (2018)
• Jinbo Luo (Jiangxi) & Xiaoran Ni (Xiamen), When Short Seller Meets Government Stakeholder: The Case of Corporate Tax Avoidance (2018)
• Joel S. Newman (Wake Forest), Championship Rings, Lexis Fed. Tax J. Quar. (2018)
• Omolara Okesola, Impact of Thin Capitalization Rules on Tax Revenue in an Emerging Economy. Case Study: Latvia, 2000-2016 (2018)
• Michal Radvan (Massaryk) & Johan Schweigl (Massaryk), Corporate Tax Residence in the Czech Republic in EATLP International Tax Series: Corporate Tax Residence and Mobility 213 (Edoardo Traversa, ed., 2018)
• Shayak Sarkar (UC Davis) & Josh Rosenthal, Exclusionary Taxation, 53 Harv. C.R.-C.L. L. Rev. ___ (2019)
• Erin A. Scharff (Arizona State), Green Fees: The Challenge of Pricing Externalities Under State Law, 97 Neb. L. Rev. 168 (2018)
• Deepak Sethia (Indian Institute of Management), Interregional Fiscal Flows and Horizontal Fiscal Equalization in India, 2001-2015, 66 Can. Tax J. __ (2018)
• Sylvia Villios (Adelaide), Wine Options of Australian Tax Reform, 15 ejournal of Tax Research 22 (2018)