President Obama’s executive actions on gun control announced this week have made waves on both ends of the political spectrum. Republicans have vowed to fight the measures while Democrats have been supportive. There is also much disagreement on whether they would have prevented any gun deaths had they been enacted earlier, The Street reports.
Two things are for certain: If they prevent gun deaths, it could save taxpayers a lot of money; and certain gun companies are sure to benefit.
The Obama administration has pledged ensure that anyone who is engaged in the business of selling firearms is licensed and conducts background checks on customers. It has ordered the FBI to overhaul its federal background check system and hire more than 230 additional examiners and other staff to help process checks. Moreover, the president has said his 2017 budget will include funding for 200 new Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) agents and investigators to enforce gun laws. The federal government will also dedicate $4 million to enhance the National Integrated Ballistics Information Network, and the administration has proposed a new $500 million investment in improved mental health care services.
A report produced by liberal magazine Mother Jones based on research from Ted Miller of the Pacific Institute for research and Evaluation, an independent nonprofit organization based in Maryland, calculated the cost of gun violence in America using 2012 data.
The findings: medical expenses, court costs, police investigations, prison for perpetrators, lost wages for victims and other economic impacts of firearm violence add up to $229 billion a year, or about $700 per person. Direct costs are estimated to be $8.6 billion, 87% of which falls to taxpayers.
“Even before accounting for the more intangible costs of the violence…the average cost to taxpayers for a single gun homicide in America is nearly $400,000. And we pay for 32 of them every single day,” the report reads.
And the costs wouldn’t be very high. The Hill points out that two pieces of Obama’s proposal — investments in mental health services and more ATF agents — would require Congressional action in the next spending bill. According to William Vizzard, a criminal justice professor at California State University Sacramento who worked for 27 years as an agent of the ATF, it won’t come at a notable cost to American taxpayers.
“It’s miniscule,” he said. “Assuming the FBI hires some more clericals to do background checks and ATF hires some more agents, in the construct of the federal budget, it’s probably one sortie by an F-16 over Iraq.” Moreover, he emphasized that most of what Obama has announced is not new.
“All he’s doing is affirming the laws that already exist, so from a standpoint of costs to individuals, there really isn’t any,” he said.
Good for Gun Companies
While Obama’s gun measures could, if effective, potentially lighten the tax burden load, they will almost certainly lead to an at least temporary boom in the business of guns. Some gun stocks soared on Tuesday as investors anticipated Obama’s announcement would lead to an uptick in firearm sales. Gun manufacturer Smith & Wesson (SWHC – Get Report) gained 11%, and competitor Sturm, Ruger & Company (RGR – Get Report) climbed nearly 7%.
The New York Times highlighted peaks in gun sales in recent years when the president or other government officials announced tightened gun restrictions. Headlines touted Obama as the “best gun salesman” on earth.
Not only are Obama’s measures likely to spur a jump in gun sales, but according to David Kopel, associate policy analyst at the Cato Institute and adjunct professor of advanced constitutional law at Denver University, they may also cause an increase in gun licenses — in other words, more (legal) sellers. As per the Gun Control Act of 1968, those engaged in the business of firearms have been required to apply for a federal firearms license, which currently costs $200 and lasts for three years.
Under the Clinton administration, a shift in firearms policies essentially redefined the meaning of “engaging in the business” of guns to exclude individuals selling only several guns per year. In turn, many gun dealers lost their licenses because they were, effectively, not selling enough guns. While Clinton was in office, the number of licenses decreased dramatically to under 70,000 by 2000 from about 250,000 in 1992.
The White House has not specified a number of firearms sold to require a license; however, it has pointed to court cases where individuals were prosecuted for the unlicensed sale of just one or two guns. In other words, the definition of engaged in the business might be broader. “If you let these people [who lost federal firearms licenses] get back into business, that’ll get that aspect of the market going again,” he said.
In other words, Obama’s measures could potentially lead to more licensed dealers. Not everyone agrees. John Lott, founder and president of the Crime Prevention Research Center and Fox News columnist, said he believes Obama’s measures will make it more expensive for people to get guns and drive dealers out of the business. “I think financially, the big cost is this will be a substantial effective tax on the purchase of guns,” he said.
Not that the gun business is hurting. Firearms sales hit the highest level on record in 2015, with federal data indicating FBI background checks on firearms purchases reached 23.1 million last year.