Tuesday, July 10, 2012

the ATF Tax: Making Sense of the NRA

Part of Enforcement is Taxation


The modern Alcohol, Tobacco and Firearms -- the ATF -- has always been a convenient mechanism to control inconvenient problems.  Booze, cigarettes and guns, the mandate for the Bureau now includes explosives, have been a part of the American culture from the beginning.  Each of these four areas has comprised a traditional, elemental freedom here but each has also fit nicely into one larcenous niche after another more than once.

The history leading up to what we now have is interesting.  It is necessary to look over this history in preparation for the MeanMesa suggestion which follows.  (Read the entire Helium article about the history of the ATF here. )


History of the Bureau of Alcohol, Tobacco and Firearms (ATF)

by Effie Moore Sale

When was the ATF established? Its earliest history dates from 1789 according to the Oxford University Press. At first tax revenue was its top priority since all three of these items brought in heavy taxes and with that existence of fraud and neglect of duty. It makes detection easier and is more efficient.

At first, alcohol was the prime area of investigation when Alexander Hamilton, as Treasury Secretary, suggested a tax on alcohol imports as a means to finance the Revolutionary War. Later in 1791, local distribution of alcohol was taxed. This created uproar and eventually led to the Whiskey Rebellion. The revenue department won out; although then, as now, enforcement has been problematic.

Firearm regulations and investigating concerns became a part of the now ATF with the Gun Control Act of 1968. In 1954 terrorism made its debut when Title X of the Organized Crime Control Act in 1972 was added to the Bureau. In 1982, the Anti-Arson Act of 1982 added detection of this vicious crime to the other duties of this organization.

Washington DC is home to the parent agency of ATF, but offices are scattered throughout the United States. Until 2003 this tri-fold group remained a part of the Treasury Department but has had several alterations and add-ons and name changes. Its time route from its first entry in the Constitution to its transference from the Treasury Department to the Department of Justice is shown below by its various name changes and dates of legislative action since 1791.

In 1774 the Whiskey rebellion forced the tax legislation to bulge at the seams but it did not dismantle the act.

In 1762 the Internal Revenue started its own office within the Treasury Department. Tobacco was included.

In 1863 the department began its own department investigative revenue agents. In the beginning there were three.

In 1875, The Whiskey Ring was detected and "dismantled". This was made up of corrupt Agricultural concerns, corrupt politicians, and corrupt tax evaders. The Civil Crime Reform Act was passed into law because of this fraudulent scheme emerging upon honest citizens' conscience.

In 1919, Prohibition with its illegal use of alcohol kept detectives and lawyers and judges busy for a few years.

In 1927 The ATF was given its own unit within the Treasury department.
In July, 1930 The Bureau of Prohibition was moved to the Department of Justice, yet its tax division stayed with the Treasury Department; its new name becoming The Bureau of Industrial Alcohol. Heading this task force was Elliot Ness, the one who eventually convicted Al Capone for tax evasion.

1933, the Twenty-first Amendment did away with prohibition and alcohol legally flowed again. Franklin Delano Roosevelt, as the new president succeeding President Hoover, in an attempt to stymie the Great Depression, signed into law The Natural Industrial Recovery Act along with the Federal Alcohol Control Administration which was designed to work jointly with the Agriculture and the Treasury Departments. It was short lived. (In 1935 FDR changed his mind again and created the Federal Alcohol Administration Act.)

In 1934, The Alcohol Tax (ATU) came into being. It was an agency of both the Treasury Department and the Internal Revenue service.

In 1942 firearms joined the list.

In 1952, the Miscellaneous Tax Service became part of ATU, becoming the Bureau of Internal Revenue. ATU was renamed Alcohol and Tobacco Tax Division.

In 1968, The Gun Control Act was added.

In 1970, Title X1 became the Organized Crime Control Act.

In 1972, the ATF became independent.

In 1982, The Anti-arson Act added its investigative duties to ATF.

Note: Although the name has remained the same, since 2003, explosives have been added to the list making the name more appropriately the Bureau of Alcohol, Tobacco, Firearms and Explosives.

 Old and Perfect Enemies

ATF is the ultimate "tormentor" of the nut cases in the NRA.  When they wish to frighten their children at bed time, the gun nuts simply tell them that ATF agents are skulking around in the yard. Further, even in the daytime, the gun nuts love to sneak around, have secret meetings, indulge in conspiracy theories like they were at a cheap sex and heroin party and generally pound on their chests every time the NRA tells them to pound on their chests.

The very day that the "NRA Trucks" show up in Washington D.C., every elected official from either party pulls out his prayer rug, kneels obediently and begins to pay what would otherwise be a politically embarrassing homage.  The undeserved influence the bunch enjoys in the Congress derives from the instant manifestation of 2nd Amendment conspiracy theories they can so easily ignite among the semi-comatose patriots.

Examples abound, but perhaps the most recent is the Fast and Furious "scandal" which emerged in the House.  By very tediously insinuating a very tenuous thread from the DOJ's botched strategy, concern with official incompetence vaporized along with the missing evidence leaving only a rickety scaffold of the "terror of terrors," gun control.

Every possible scheme can be drenched with "odorous gun control," braised slightly and then sold as a deliciously unthinkable monstrosity to the NRA's base.  Because of this, absolutely no progress, whatsoever, under any conditions, toward a rational gun policy can even so much as be murmured softly without a similar reaction.

Here, MeanMesa can offer a proposal.

The ATF as Both Enforcement and Taxation

The ATF has already had periods through its history when both law enforcement and taxation were its primary mission.  Now, the taxation part begins to emerge as a possible alternative to the ATF's exclusive role of enforcement of gun laws.  The inability to prosecute the miscreants exposed by the Fast and Furious program was, as it turns out, exactly why the plan failed.

Both federal and state governments have been using the tobacco tax as an ATM machine for decades.  When these governments can't figure out any other way to raise taxes without getting hammered, they simply add more tax to a package of cigarettes.  However, the other two elements named in the ATF's title, alcohol and firearms, seem to enjoy a strange, suspicious exclusion from what has happened to the cigarette manufacturers.

The justifying proposition for the relentless increases in tobacco taxes is founded on the costs of the health care made necessary by the product.  What's missing in the equation may very well be the corresponding costs originating from alcohol and firearm use.

When the sin taxes are being considered, the liquor manufacturers are curiously quiet.  MeanMesa suspects this is the case because they are, at least temporarily, satisfied with the great deal that their lobbyists have already procured for them.  If the tax on alcohol were to represent even so much as 1/100th of the cost that the country pays for the damage it causes, these whiskey suppliers would be screaming to high heaven.

The ATF generates revenue as it enforces laws concerning alcohol, tobacco and firearms, but this revenue is primarily justified as compensation for the costs of operating of the Bureau and the investigation and prosecution of those who break the laws.  This is a mistake.

The "tobacco tax model" for creating taxation to compensate incurred expenses from the product's use should be expanded to include the ATF's other two namesakes.  Further, the "ATF Tax" should be consolidated for all three elements.  The legislators have grown quite comfortable with the now palatable prospect of increasing tobacco taxes whenever they wish, and this newly discovered tolerance for tax increases should expand to include both alcohol and firearms sales.

The 2nd Amendment says that citizens must be free to own firearms, but it says nothing about the rest of us having to pay the monumental damages gun ownership can -- and does -- often lead to for our General Fund tax dollars.  While the "gun boys" are strutting around with their flags and whiskey, they are speaking only of the freedom.  At the modest inner city funeral of a black teen ager who took a bullet, the "gun boys" have conveniently pocketed their check books and handed the incredible bill over to the tax payers.

The $50,000 the hospital spent trying to keep him alive pales next to the federal support which will be required to rehabilitate his terrified little sister, provide social counsel for a family subsequent to the violence and treat the teen's mother for drug addiction in five years.

It's really very cheap for the arms makers to keep the 2nd Amendment "gun boys" in a state on continuous frenzy.  All this is required is another can of gasoline poured on the beer drenched floor of an American Legion bar at midnight.  After that incendiary assistance, the hill billies won't sleep a wink amid the screaming for the next two weeks.

MeanMesa doubts that the arms makers even have to actually pay the reactionary media for its help in keeping the thing aflame.

The incredible costs incurred from drinking liquor fit very nicely into the same category.  When the national "tab" for all the damage which results from drinking is compared to the current tax revenues collected from the practice, the disparity is apparent.  None of these totals are beyond a serious effort to investigate them.

In Malmo, Sweden, during the 1980's a half pint of whiskey was priced at $45 [US].  A conviction for drunk driving was commensurate with a manslaughter conviction in the United States.  That country was taxing and prosecuting based on actual costs to the nation's economy and tax payers.

The "ATF Tax" would move the United States toward a similar position.

 "Bundle" the Tax Rates

By "tax rates," we speak of the sales tax for the purchase of the respective commodities in all three of the ATF's fields of responsibility.  The sales tax rates for cigarettes have already been raised to sky high levels, but the sales tax rates for guns and alcohol seemed to have been spared.  This proposal suggests setting a single sales tax rate for all three.

Not Responsible for Anything -- including the taxes to pay for the damages (image source)


Every time the legislators are looking for some free tax revenue from the cigarette industry, the alcohol and firearms industry would be automatically included.  Calculating the combined cost to taxpayers from the sale and use of all three is not rocket science, but, rest assured, the tax rate derived from such calculations would be much higher than now.

The correct target for sales tax revenue from ATF commodities is the entire cost incurred by all of these elements and the damage they all inflict on domestic tranquility, health care costs and judicial costs -- not to mention the pain and suffering inflicted on families by cancer, alcoholism and gun injuries.  Look at the "cost" of the Trayvon Martin case.

Make the "wide open" buying and selling of firearms pay for the damages it causes -- including the Mexican drug cartels when they do their shopping at unregulated gun show markets.

A similar case can be made for the gun manufacturers and their weapons merchants.  When a new fire arm is purchased in WalMart or Ernie's Old Rugged Cross Gun Shop, a standard sales tax is included in the price.  However, the entire revenue collected by the government via this mechanism wouldn't pay for the paint on the coffins of the human suffering made possible by that sale.  One day later when that same gun is sold at the 4H Fair in Farmville, most likely no tax is collected at all.

The sales tax imposed by a consolidated ATF Tax Law would change all this.  An additional benefit would be an increased capacity to record the new owners of guns, regardless of where they were purchased.  Straight, "nose to nose" enforcement of any sort of gun control may be out of the question, but sales tax collections would prove far less inflammatory.

Further, as the price of a pint of liquor increased because of a rational sales tax rate, not only would the taxpayer compensated damages caused by drinking be somewhat mitigated, the higher price might well change some of the worse drinking habits.

We are all looking for ways to make the tax budget more sensible.  This is a good one.

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