Senate passes excise tax reform
NSSF:
The Senate yesterday passed legislation that corrects a longstanding inequity in the Internal Revenue Code by permitting firearm and ammunition manufacturers to pay the federal excise tax payment on a quarterly basis, just as other industries that support conservation through a federal excise tax on their products do. Currently, firearms and ammunition manufacturers pay this tax on a bi-weekly schedule, forcing many manufacturers to borrow money to ensure on-time payment.
Easier solution is to get rid of the tax.
Now, the bill is heading to Obama.
August 6th, 2010 at 10:28 am
I wonder if this will lead to a drop, even if a small one, in the price of arms and ammunition. If companies are having to borrow money to pay off Uncle Sugar then the savings in not having to pay that interest could be passed on.
Now if they killed the tax altogether I’m wondering if prices would drop or if the companies would just suck up the extra profits. I don’t think it’s a very well known tax and I wonder how many people would notice it going away.
Then again if the MSM got wind of the tax being done away with I imagine there would be much wailing and nashing of teeth on how evil gun owners want Gaia to burn.
August 6th, 2010 at 11:01 am
First – prime rate is less than two percent, so borrowing to pay a 10% tax comes to $20.00 a thousand a year for those with excellent credit. It can be more, according to perceived risk, but even 6% is only $60.00 a thou a year. So do not expect a perceptible drop in sporting goods prices.
Second – I do remember how things were before the Pitman Robertson tax started building wildlife refuges. You really do not want to go back to the days when there were no public hunting areas, wildlife refuges, and all the other things moderns take for granted.
Stranger
August 6th, 2010 at 11:10 am
OMG!!! THERE WILL BE BLOOD IN THE STREETS!!!ONE!!!!
What? I keep seeing the antis do it and it looked like fun so I HAD to try it.
My experience: Meh… I know it isn’t true, so the thrill just wasn’t there.
s
August 6th, 2010 at 11:37 am
@Stranger – While it may only be $20/thousand if you’re having to borrow many thousands or many times a year and on the short term that adds up. It may not be worth the time for even a small company to go looking for $10 here $20 there to save, but any reduction in overhead is worth it.
Theres also the hassle of getting the loan. It may simply be a revolving line of credit at the bank or a corporate credit card, but that still adds costs. Fees, people to manage it, and paying things quarterly can have big impact on your budgeting.
I agree it may not be a huge savings or easy to measure, but that doesn’t mean it won’t count for something for firearms manufacturers.
August 6th, 2010 at 1:02 pm
Most manufacturing business rely heavily on lines of credit.
August 6th, 2010 at 4:50 pm
“Now, the bill is heading to Obama.”
Which he will soon veto. Or let pass without signaturre.
August 6th, 2010 at 6:02 pm
Uh, why would anyone have to borrow the money to remit the tax? Are there really that many guns sold on the installment plan? I’m probably missing something here.
One also is given to wonder what new infringements are attached to this measure. It’s a valid question.
Stranger; The default assumption should be that when it comes to public works; anything worthwhile that the government could do, the private sector can do ten times better and at a small fraction of the total cost. In other cases, it shouldn’t be done at all and so the private sector would never consider it.
Where government moves in, private initiative moves out. The bigger the government, the smaller the citizen.
August 6th, 2010 at 8:54 pm
Lyle, very few businesses get paid for their shipments in a matter of weeks these days … if they get paid at all.