What Works in this Country? Us!

As everyone in our industry knows, the big news of the last seven or eight months has been the phenomenal surge in sales of both guns and ammunition’oddly enough, coming at a time when the economy is in a serious slump. We’ve also heard about the 20- or 30-percent increase in background checks processed through NICS. But we had no way to determine how much money these sales have been pumping into our economy or the volume of tax dollars flowing into the federal coffers as a result of this business.

At least we had no way until the most recent Firearms and Ammunition Excise Tax Collection Report was released by the Department of the Treasury just before this issue went to press. During a time when whole industries are collapsing, firearm and ammo manufacturers paid almost $100 million in federal excise taxes during the fourth quarter of 2008, up more than 30 percent from the same period in 2007.

Manufacturers of firearms and ammunition pay a federal excise tax on all firearms and ammunition manufactured, which is a major source of wildlife conservation funding. The Treasury’s report shows that in the fourth quarter $27.6 million was collected from the sale of pistols and revolvers, $35.0 million from long guns, and $35.5 million from ammunition sales. Compared to the same quarter in 2007, collections were up 70.1 percent for handguns, 11.4 percent for long guns, and 31.1 percent for ammunition.

The figures for the entire year of 2008 show a total of $345.2 million was collected in excise taxes on guns and ammo, up from the $303.2 million collected in 2007. Although excise taxes are one of the best indicators of industry performance, it’s difficult to translate these number into actual sales or total economic impact. Excise taxes don’t reflect the retail markup or the final retail sales, and these figures are based solely on U. S. civilian sales.

Excise taxes don’t tell us anything about sales to military and lawenforcement agencies. Nevertheless, based on the excise-tax numbers, NSSF has estimated that sales in calendar year 2007 totaled approximately $907 million for handguns, $1.15 billion for long guns, and $1.16 billion for ammunition. That’s a total of over $3.2 billion in U. S. civilian sales alone.

I’m no economist, but I know you can easily add another couple of billion dollars to that 3.2 billion for parts and accessories, holsters and gun cases, cleaning supplies, and so forth. Then, just try to imagine how much money gun manufacturers and gun dealers (and gunsmiths) pay in federal, state, and local taxes on the profits on those sales. Then add the state and local sales taxes the consumers pay on those sales.

And then, for good measure, throw in the federal and state income taxes paid by the employees who make those products and those employed in selling (and servicing) those products. It doesn’t take a genius to realize that our industry is staggeringly successful and the total impact of our industry on the U. S. economy is mind-bogglingly huge. I just hope our legislators think about our contribution the next time they write a bailout check for the ailing banking, insurance, and automobile industries.

Editor Keith Lawrence Technical