Let the Firearm Industry Pay for the Cost of Gun Violence

If gun purchasers had to pick up a share of the cost of gun violence, the gun industry would be motivated to develop smart ways to reduce gun violence without interfering with lawful gun ownership.

By SHARE
FE_DA_0103_Walmart_guns.jpg
Guns for sale at a Wal-Mart.

David Brodwin is a cofounder and board member of American Sustainable Business Council. Follow him on Twitter at @davidbrodwin.

A cornerstone of capitalism is that no company gets a free ride. Each business or industry needs to charge enough to cover the full cost of its own operations. Those that can't cover their costs must (with rare exceptions) be allowed to fail. This basic law of capitalism needs to be applied to firearms.

Many industries generate costs that are not fully covered in the in the price of the product or service. These costs—called "externalities" by economists—get imposed on the public at large, unless fees are imposed to put the costs where they belong. For example, each year America spends billions to maintain and extend highways and airports so people and freight can move efficiently. And America spends billions to provide medical care to smokers with lung cancer and emphysema. 

[See a collection of political cartoons on the economy.]

In an efficient, well-managed economy these costs are charged back to the industries that create them. They are charged in the form of fees and taxes. Our gas taxes pay to maintain roads. Our plane tickets include a small tax to pay for airport security. Our cigarettes are taxed to cover part of the cost of smoking-related illnesses. If you want to drive, fly, or smoke you must contribute toward the total cost of these activities. This is widely accepted.

However, the firearms industry has managed to avoid picking up the tab for its externalities. A recent proposal by Wayne LaPierre of the National Rifle Association shows the size of the problem. After the Sandy Hook school shooting, the NRA proposed that the best solution to gun violence in school is to have more guns in school. They argued that every school should post an armed guard (or several) to stop would-be shooters. Let's set aside the constitutional and practical considerations and just consider the economics of this for a moment: It would cost nearly $5 billion per year to put a trained, equipped, armed guard in each of America's 132,000 K-12 schools. That calls for a fee—let's call it the "Schools Security Fee"—of $500 to $750 for every new and used handgun purchased in the United States. The fee is roughly the cost of a typical good-quality new pistol! If imposed, it would double the price of handguns and cripple the firearm industry. Yet it's ironic that many of the folks who claim to hate taxes and government see no problem in proposing a $5 billion expansion in government, which necessitates taxes to pay for it.

[See a collection of political cartoons on gun control and gun rights.]

As an alternative to a tax on gun sales, we could pay for school security with a fee for gun ownership; each owner would have to pay about $16 per gun per year. Or we could pay a fee of one half penny for every cartridge fired, so that frequent shooters would pay more and occasional shooters would pay less. Any of these measures would raise enough to keep our K-12 schools protected and secure.

Sadly, the cost of securing schools is only a small part of the cost of gun violence. Estimates of the cost of gun violence range from $32 billion to $100 billion per year. This is actually a conservative estimate: Each year around 11,000 people are shot and killed in homicides (ignoring suicides) in the United States and most economists agree that it's fair to say an average life is worth between $3 million and $10 million in purely economic terms. If gun purchasers had to pick up even a small share of the cost of gun violence, the gun industry would be motivated to develop smart ways to reduce gun violence without interfering with lawful gun ownership and legitimate use. This would let Americans have both the safety we need and the freedom we cherish.

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