Placeholder Image

Gun Policy

Seattle Proposes a Gun Tax That Could Make Wonks Swoon

Economists on the left and right alike embrace the theory behind the levy the city council president wants to implement. But the political realities are where things get sticky.

Gun violence doesn’t just harm individual victims — shootings also strain public coffers when the government is on the hook for medical and law enforcement costs. In Seattle, according to city officials, taxpayers covered $12 million of $17 million in gun-related medical costs at just one hospital last year. Next Wednesday, the Seattle city council will consider a new policy measure, a “gun violence tax,” that would add an excise of $25 to every firearm and five cents to each round of ammunition sold in the city. Funds raised in this manner would be dedicated to gun violence prevention and public health research. The city’s budget office projects the tax would raise between $300,000 and $500,000 per year.

The measure is what’s known as a Pigovian tax, named after early 20th century economist Arthur Pigou, and it’s the rare tax mechanism beloved by wonks across the political spectrum. Taxes like the proposed Seattle levy on guns and ammunition are like existing taxes on cigarettes or alcohol: They’re intended to disincentivize and defray the cost of harmful behavior. These taxes make Econ. 101 professors smile: They remedy externalities, costs incurred on society by individuals who wouldn’t otherwise pick up the bill. Greg Mankiw, the well-known conservative Harvard economist, described a Wall Street Journal editorial he wrote on raising gas taxes as “The Pigou Club Manifesto,” since such a tax could both penalize pollution and traffic congestion while paying to mitigate those same harms. The Seattle proposal is a textbook Pigovian tax, since it would raise money earmarked to reduce the harm associated with the behavior it taxes, as opposed to simply adding to the city’s general fund.

While economists love Pigovian taxes as policy interventions, actual policymakers and their constituents may not always be so keen, which complicates their implementation. A proposed Pigovian tax on carbon emissions, described as “win-win-win” by M.I.T. economists since it could reduce pollution and allow for reductions in other taxes that might then spur economic growth, remains sidelined by fears of an electoral backlash. President Obama insists he would never propose such a measure, even as he pursues other politically and legally risky strategies for reducing carbon emissions with fewer budgetary benefits.

Donald Marron, a fellow at the Urban Institute who’s studied Pigovian taxes, tells The Trace that his colleagues like these policies since “we economists are often a fan of putting prices on things.” But he had some questions about the Seattle proposal. Aside from the fact that these taxes are regressive, they work best when the thing being taxed definitely creates a cost to society, like plastic shopping bags that always end up in the waste stream. It’s hard to put a precise number on how many guns and how much ammunition sold in Seattle result in violent injuries. “If it’s the case that there’s a small subset that’s causing harm, then the tax is a blunt instrument,” Marron says. A tax could also just persuade Seattle gun buyers to shop outside city limits.

Tim Burgess, the Seattle City Council President who introduced the gun violence tax, readily acknowledges these limitations or possible unintended consequences. “This would be much, much better if it could be done on a statewide basis,” Burgess told The Trace, recognizing that the tax could nudge Seattle gun buyers to shop outside the city to escape the tax. He’s also not swayed by those questions. Burgess is a former Seattle detective who has seen the effects of gun violence up close. His priority is funding new gun violence prevention programs at Harborview Medical Center, the regional trauma center, which developed interventions based on similar work done in the ’90s to reduce readmission of patients for alcohol-related injuries. That program, which advises patients on the health risks of alcohol, is now standard in trauma centers around the country.

Burgess hopes the public health initiatives funded by the gun and ammo taxes will become similarly widespread. The hospital released a study last July that found that gun violence victims were twice as likely to be arrested for violent gun crimes than those who’ve never suffered a gun-related injury. Those subsequent arrests in turn create two potential additional costs — one resulting from any subsidized hospital treatment for the victim, and the other from prosecuting and potentially incarcerating the shooter. The interventions that Harborview is developing are meant to stop that cycle. 

But the actual Pigovian effects may not be the point of Burgess’s proposal — it comes in the context of Washington state’s political tug of war between liberal Seattle and the more conservative state legislature, which has stymied past efforts to reduce gun violence. Instead, he says he wants Seattle to show it can take action on gun violence “in a way that’s not an anti-gun screed, but is focused on public health and the safety of our neighborhoods.”

[Photo: Daniel Schwen via Wikimedia Commons]