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Q. This week, Sen. Moynihan pressed his case for an ammo tax of 10,000% on
handgun ammunition to help pay for health due. Would you support such a tax?
A. Sen. Moynihan makes an important connection that I've been trying to highlight as
well, about the enormous health care costs we pay because of violence -- and in particular,
gun violence. Every weekend, emergency rooms across the country are filled with people
who've been cut up or shot up. We spend over $4 billion a year on this problem, and
sometimes we spend half a million dollars or more to fix somebody who was shot with a $35
handgun and a $5 box of bullets .
.I like the way we pay for health care in our plan -- by raising taxes on cigarettes, etc.
I don't know if an ammunition tax is the right way to go, but I do think we ought to pay
more attention to some of the most lethal ammunition out there -- especially armor-piercing
bullets. We ought to look at ways to strengthen the ban on armor-piercing bullets. Nobody's
. using those bullets to go deer hunting; they're using armor-piercing bullets to gun down our
.cops.
�.*
.~
~
DEPARTMENT OF THE TREASURY
WASHINGTON
GENERAL COUNSEL
The Honorable Daniel P. ,Moynihan
Chairman
Committee on Finance
United States Senate
Washington, D.C. 20510
Dear Hr. Chairman:
This responds to your request for the views of the
Department of the Treasury on S. 868, the "Firearm Victims
Protection Act," the purpose of which is to help reduce the
public health care cost resulting from firearm related injury
and death.
The Department of the Treasury .is examining whether
an increase in the excise tax on firearms and ammunition is
appropriate and whether any increase should apply to all firearms
and ammunition or only to firearms and ammunition most commonly
associated with gunshot fatalities and wounds. Although our
examination i~ continuing, we would nevertheless like to offer
several observations concerning the bill, and we would be pleased
to work with the committee as it considers the legislation.
Proposed section 4181(b) (1) defines "handgun" as "a
firearm which, at the time of manufacture, had a barrel of less
than 12 inches in length." If the purpose of this section is to
tax those firearms commonly known as "handguns" at 25 percent, we
note that a number of handguns have barrel lengths in excess of
12 inches (~, the Remington XP100 Silhouette pistol (14 1/2
inches), the Thompson Center Contender pistol (available in 10,
14 and 16 inches), and the Magnum Research SSP91 single shot
pistol (14 inches». We also note that the definition of handgun
is not limited to firearms that may be fired with one hand, but
would also include rifles and shotguns with barrels of less than
12 inches.
The definition of "assault weapon" in proposed section
4181(b)(2) is unclear. By defining assault weapons in part as
having a barrel length of between 12 and 18 inches, many assault
type rifles would be excluded from the 25 percent tax rate (~,
the AR-15, the M1A, and the HK91 rifles, all of which have barrel
lengths exceeding 18 inches). Furthermore, including the phrase
"capable of receiving ammunition directly from a large capacity
ammunition magazine" in the definition bas little meaning since
any firearm designed to accept a detachable magazine can accept
a large capacity magazine.
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The definition of·"assault weapon" also uses the phrase
"concealable by a person." This language is meaningless because
any firearm, irrespective of barrel length, can be concealed "by"
a person. Since the apparent intent of the language is to
include within the definition firearms that are "not concealable
on" a person, we recommend that proposed section
41S1(b) (2) (A) (ii) (I) be amended accordingly.
Finally, we are concerned that proposed section
41S1(b) (2) (B) is too vague~because any semiautomatic firearm
would be substantially functionally equivalent to any other
semiautomatic firearm as defined in proposed section
41S1(b) (2) (A) (ii).
section 3(b) of the bill would amend chapter 31 of
the Internal Revenue Code, which concerns retail excise taxes,
by adding a new subchapter 0, "Handguns and Assault Weapons."
However, since Section3(b) generally would only tax transactions
after the first retail sale (most first retail sales of firearms
and·aInmunition are subject to the tax imposed by IRC section
41S1), we do not believe chapter 31 is the appropriate chapter in
which to include the new tax. Furthermore, although proposed
subchapter 0 imposes a tax on transactions other than sales, it
fails to include a provision determining a constructive price on
which to compute the tax.
section 4 of the bill would create a Health Care Trust
Fund into which the taxes collected under IRC section. 4056, that
portion of IRC section 41S1 attributable to the tax on articles
subject to the 25-percent rate, and proposed new IRC subchapter
o would be deposited. It should be noted, however, that this
provision appears to repeal part of the Pittman-Robertson
Wildlife Restoration Act (16U.S.C. 669), which states that
all taxes imposed by IRC sections 4161(b) and 41S1, with certain
exceptions, are to be deposited into another fund and used by
the states for various wildlife projects, hunter safety training
programs, and recreational programs.
The Department strongly supports increasing the level
of fees charged·for Federal firearms licenses as proposed in
section 5 of the bill. Higher fees would help defray the
increased costs associated with processing and investigating
firearms dealer license applications and annual license renewals.
More importantly, increased fees would discourage the filing of
license applications by persons who have no intent to engage
in the firearms business, but whose only interest in seeking
a license is to obtain firearms at wholesale prices or in
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interstate commerce. The Department estimates that approximately
one-third of Federal firearms licensees made no firearms sales
within the past year, and that about 40 percent made ten or fewer
sales during that same period. Nevertheless, determining the
level -at which the increased fees should be set, a level that
wouldacc~mplish the foregoing without discouraging legitmate
business, is a matter under study by the Department.
Finally, the Department does not support the earmarking
of tax receipts for unrelated expenditure purposes, as proposed
in sections 4 and 5 of the bill. Such earmarking exacerbates the
problem of budgetary control, and the Department has consistently
maintained that tax receipts should be available in the general
fund of the Treasury for appropriation by the Congress for
current programs and objectives. Furthermore, we believe that
the proposed grants to health care providers ·from the Health Care
Trust Fund to be established by section 4 of the bill should
instead be considered in the context of health care reform.
The Office of Management and Budget has advised that
there is no objection from the standpoint of the Administration's
program to the submission of this report to your Committee.
Sincerely,
Jean-E. Hanson
General Counsel
�
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Bruce Reed - Crime Series
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Domestic Policy Council
Bruce Reed
Crime Series
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<a href="http://clinton.presidentiallibraries.us/items/show/36311" target="_blank">Collection Finding Aid</a>
<a href="http://catalog.archives.gov/description/647420" target="_blank">National Archives Catalog Description</a>
Description
An account of the resource
Bruce Reed's Crime Series includes material pertaining to the Omnibus Crime Act of 1994, costs and financing of the 1994 Act, Congressional conference drafts of the 1994 Act, and results of the 1994 Act; the 100,000 COPS program; various gun issues and topics; negotiations with the gun industry and settlement in 2000 with Smith & Wesson; the Brady Bill; the Racial Justice Act; the 1999 Gun Show Bill; victims’ rights; school violence; and habeas reform.
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Clinton Presidential Records: White House Staff and Office Files
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Clinton Presidential Library & Museum
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245 folders in 18 boxes
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Bullet Tax
Creator
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Domestic Policy Council
Bruce Reed
Crime Series
Is Part Of
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Box 70
<a href="http://clintonlibrary.gov/assets/Documents/Finding-Aids/Systematic/Reed-Crime-finding-aid.pdf" target="_blank">Collection Finding Aid</a>
<a href="http://catalog.archives.gov/description/647420" target="_blank">National Archives Catalog Description</a>
Provenance
A statement of any changes in ownership and custody of the resource since its creation that are significant for its authenticity, integrity, and interpretation. The statement may include a description of any changes successive custodians made to the resource.
Clinton Presidential Records: White House Staff and Office Files
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Adobe Acrobat Document
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Clinton Presidential Library & Museum
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3/19/2011
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647420-bullet-tax.pdf
647420