Bloomberg Tax
Oct. 26, 2022, 8:45 AM

A ‘Social Harms’ Tax Can End the US Gun Crisis, Constitutionally

Don Griswold
Don Griswold
Digital Economist

Gun violence is the leading cause of death among children and adolescents in America. Over 100 people are killed with guns each day here; twice that many are shot and wounded. We experience a mass shooting almost twice daily. No need to list illustrations here; our souls are seared by the names, the places, the images.

In the absence of adequate regulatory action, the tragedy of gun violence here extends from day to deadly day. We have not yet learned how to escape the devastating social harms associated with the Second Amendment right to bear arms.

But I did not lose hope four months ago when the US Supreme Court decision in NYS Rifle & Pistol Ass’n v Bruen made it even harder to regulate our way to American safety, or earlier this month, when a lower court ruled New York can’t even ban guns on the subway or in ever-crowded Times Square.

My hope did not waver because there is a path out of this American nightmare: Even after Bruen, our federal and state governments remain constitutionally free to impose broad-based taxes on activities that cause significant social harms but that cannot (for whatever reason) be adequately regulated.

Problem: A Constitutional Right To Cause Harms

One of our nation’s tragic constitutional tensions lies at the intersection of the Second Amendment’s right “to keep and bear arms” with the Preamble’s aspiration to “insure domestic tranquility [and] promote the general welfare.” When exercise of a constitutionally-guaranteed individual right catastrophically harms our constitutionally-intended community safety, what is to be done?

How do we mitigate the community harm while respecting the individual right? That is the central problem inherent in the Second Amendment.

Our ideologically conservative high court—unwilling to countenance meaningful gun regulation and callously careless of the devastating social consequences—created this problem two decades ago, disrupting two centuries of tension-free interpretation.

Despite the long American tradition of gun control dating from the colonial era, and despite its own 1939 decision that the Second Amendment protects only state militia-related gun ownership, the justices reversed themselves in 2008 to ban DC’s regulatory attempt to protect its residents from rampant gun violence, finding for the first time in history that the Constitution protects an individual’s right to possess and carry guns—and that this right outranks public safety.

In Bruen—widely criticized as “the most dangerous gun ruling in history, at the worst possible time”—Justice Samuel Alito prohibited virtually any targeted state regulatory effort to protect its citizens from gun violence, callously asking, “Why … does the dissent think it is relevant to recount the mass shootings that have occurred in recent years?”

But the people and their policy-makers must accept the high court’s new ruling—despite its intellectual and empathetic bankruptcy—as the new law of the land (for now). That is also a deeply American tradition. Our task is to discover a new path toward safety in America, despite Bruen. Let’s talk about one such path.

A man chooses a gun at the Gun Gallery in Glendale, Calif.
Photographer: Gabriel Bouys/AFP via Getty Images

Solution: Tax to True-Up the Costs, But Respect Rights

“Social harms taxes” reallocate the economic costs of gun violence—over half a trillion dollars a year—from the harmed community to the armed community. Respect those who exercise their Second Amendment rights but stop making the broader community shoulder the resulting costs.

Such taxes are often called Pigouvian taxes, in a nod to economist Arthur Pigou, who noticed that actions of private participants in the marketplace or the civic square may have consequences for the community at large. Pigouvian taxes are designed to require both people and businesses to bear the social costs of their own actions, instead of saddling them on others. These taxes true-up the participants’ appreciation for the cost of their decisions.

Traditional command-and-control regulations ban or restrict people’s preferred activities. In marked contrast, Pigouvian taxes leave their liberty and rights untouched. They typically target a specific activity and its associated social harm—carbon fuels and climate change, fast foods and public health, gun ownership and student murder—on the ground that such taxes are superior to command-and-control regulation.

But the financial impact of their activities will now enter into their personal decision-making process, because they are no longer getting a free ride on the backs of other community members. Once the social harms tax is in place, those who manufacture cigarettes, guns, super-sized hamburgers, gas-powered cars—as well as those who purchase and use those products—remain at liberty to continue to do so. They will simply pay more if they do.

Design: A Broad-Based Unregulatable Social Harms Tax

Our Pigouvian social harms taxes must pass constitutional muster under Bruen while shifting gun violence costs to the firearms ecosystem, so our design must begin with restraint: These taxes must not selectively target guns or ammunition.

We must place our social harms tax in the constitutionally safe space where broad-based state sales and use taxes live. That base—including but not limited to firearms and ammunition—must cover activities that, despite causing significant harm to the American community, cannot be subjected to effective command-and-control government regulation.

Design considerations for a broad-based unregulatable social harms (BURSH) tax also include its type, levy level, rate, and use of revenues.

A consumption BURSH Tax (excise or sales and use) could be levied at the federal, state, or local levels—or all three—and should be enacted with an accompanying personal property BURSH tax. Sales taxes arise infrequently (often only once) in the life of a consumer product, so community awareness of an impending new consumption tax could precipitate a rush to purchase in advance, producing a surge of socially harmful purchases unless followed by an annual tax.

A personal property BURSH tax would be levied annually, keeping participants in the socially harmful ecosystem regularly aware of their allocable personal share of the social cost their ecosystem produces. BURSH personal property tax could be levied at the state or local levels, but may be problematic at the federal level because Article 1, Section 2, Clause 3 of the Constitution—infamous for its pro-slavery “three-fifths compromise”—arguably bars “direct” federal property taxes for all practical purposes.

BURSH sales tax rates would be set to produce a tax roughly equivalent to a sizable share of the unregulatable social harms’ cost, and might “cascade” (apply at multiple stages of the supply chain) so that different rates could be applied to manufacturers, merchants, consumers, and consumer resellers. (There should be no “sale for resale” exemption, no “occasional sales” exemption.) BURSH property tax rates would cover the remainder of the total estimated social cost.

BURSH taxes ought to be “general fund” taxes because earmarking BURSH revenues for targeted purposes might be considered inconsistent with the essential requirement—for purposes of surviving constitutional challenge—that these taxes be broad-based rather than targeted.

Action: Start Now

The uniquely American epidemic of gun violence is not insoluble, despite the Supreme Court’s concerted efforts to make it so.

Broad-based social harms taxation can redistribute Second Amendment externalities to those who create them. Enact such a tax, and the market will take care of the rest—individual liberty and public safety will gradually come to coexist in America, and our nation’s self-inflicted wound will heal.

This is a regular column from public interest tax policy analyst Don Griswold, who’s also a senior fellow at the Digital Economist. Look for Griswold’s column on Bloomberg Tax, and follow him on LinkedIn at