California has been touted as a state that experiments on its residents with new laws often not seen in other states. The latest proof of this is the landmark tax that will be introduced in July. 

It will make California the first state in the country to enforce an excise tax on guns and ammunition. The tax means an 11% levy on every sale, in addition to the current federal excise taxes of 10% or 11% for firearms and the state’s 6% sales tax.

This new law was put in place to reduce escalating gun violence and protect kids at schools where shootouts now seem to happen too often. However, the NRA is not happy about it, claiming it makes a mockery of constitutional rights and will have a significant impact on gun sales.

California’s tax policies on firearms have been compared to those on alcohol and tobacco as they are all under the Bureau of Alcohol, Tobacco, Firearms and Explosives. These products are legal but only get categorized together as they are capable of causing harm if abused. Not to mention, organized crime has always been interested in them.

With such debilitating taxes on alcohol and tobacco, more people would rather avoid them, unwilling to take on the expense, which ultimately means these products cause less harm in society. This also generates a lot of revenue that, theoretically, the government could use to fund programs that will help address the systemic problems evident in areas affected by those products. 

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Some oppose the ease with which gun lobbies thrive and have long dreamed of a day when firearms will be subjected to the same type of tax as alcohol and cigarettes, as they fall under the same category as part of the ATF. These advocates against firearms have seen the numbers and are very happy the state is moving in the right direction. In 2021 alone, the rate of gun homicide was 4.5 for every 100,000 people. 

Guns cause a lot of deaths and injuries in the US annually, but now there is also proof that it is not suitable for the economy. The benefit-cost ratio shows that the firearms industry contributes about 65 cents to the economy but costs the nation $1 thanks to medical costs. These costs do not include nonfatal injuries that happen every year in the country or activities outside it created by firearms sold here. 

The firearms industry is a money printer, and just as gun homicides have skyrocketed over the past decade, so have gun sales, with about 20 million weapons changing hands every year. The soon-to-be-introduced excise tax will impact the economy more significantly than taxes on alcohol and cigarettes. 

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Those who argue for gun safety think that guns should be subjected to even higher taxes because, unlike alcohol and cigarettes, they can not be disposed of or consumed and are in circulation for much longer after they are bought. The proposed tax gets guns tasked the same way alcohol is, but that is still 26% less than taxes on tobacco. 

Critics of the proposed law have already identified some possible issues. For one, it has yet to go over anybody’s head that California is, so far, the first and only state to implement such a tax. Secondly, the state shares a border with Nevada, a hub for illegal transportation and trade of firearms. It begs the question of how effective the law will be when people can get the firearms cheaper there. 

All eyes will be on California to see if the new excise tax reduces gun violence. If it does and is implemented nationwide, it could bring in between $1.5 billion and $1.9 billion per year. If that happens, more states could introduce similar laws, boosting the economy and reducing gun violence.

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California also shares a border with Mexico, which means Firearm fatalities have also impacted the country. The Mexican government has even hypothesized that at least 70% of guns used in crimes in Mexico have links to the US.

The excise tax on alcohol and tobacco was introduced to discourage the public from buying them. The tax is known as the “Pigouvian tax,” created by Arthur Pigou, a 20th-century economist from Britain.

While the tax discourages people, it also generates revenue for the economy, which could be used to undo the harm these products have caused. Many now wonder if California will succeed and whether other states will follow suit if they do. 

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