An economic approach to gun control: analysis of the Gun Violence Prevention and Community Safety Act of 2020

ABSTRACT Although gun violence has become one of the major social issues of the era, economic research on gun control has been severely lacking. The present note examines the proposed sales tax on firearms featured in the Gun Violence Prevention and Community Safety Act of 2020. We apply prior estimates of the price elasticities of supply and demand for firearms to a simple model of ad valorem taxation in order to calculate the tax revenue and sales reduction that could result from the bill’s enactment. We find that the proposed legislation would most likely reduce new gun sales by 30% to 44% and generate approximately $1.47 billion to $1.9 billion in federal tax revenue annually to be used for prevention and intervention against gun violence.