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California Is About To Tax Guns Like It Does Alcohol And Tobacco

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California Is About To Tax Guns Like It Does Alcohol And Tobacco


It’s the first of its kind tax in the nation and officials are hoping it puts a dent in gun violence.

Starting in July 2024, California will be the first state to charge an excise tax on guns and ammunition. The new tax — an 11% levy on each sale — will come on top of federal excise taxes of 10% or 11% for firearms and California’s 6% sales tax.

The National Rifle Association has characterized California’s Gun Violence Prevention and School Safety Act as an affront to the Constitution. But the reaction from the gun lobby and firearms manufactures may hint at something else: the impact that the measure, which is aimed at reducing gun violence, may have on sales.

As a professor who studies the economics of violence and illicit trades at the University of San Diego’s Kroc School of Peace Studies, I think this law could have important ramifications.

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One way to think about it is to compare state tax policies on firearms with those on alcohol and tobacco products. It’s not for nothing that these all appear in the name of the Bureau of Alcohol, Tobacco, Firearms and Explosives, also known as ATF.

California expects gun sales — and gun violence — to drop when a new tax on firearms goes into effect. (David Croxford/Civil Beat/2024)

What Alcohol, Tobacco And Firearms Have In Common

That agency, part of the Justice Department, is tasked with making American communities safer. The ATF focuses on those products because, while legal, they can cause significant harm to society — in the form of drunken driving, for example, or cancer-causing addictions. They also have a common history: All have been associated with criminal organizations seeking to profit from illicit markets.

Alcohol and tobacco products are thus usually subject to state excise taxes. This policy is known as a “Pigouvian tax,” named after 20th century British economist Arthur Pigou. By making a given product more expensive, such a tax leads people to buy less of it, reducing the harm to society while generating tax revenue that the state can theoretically use to offset those harms that still accrue.

California, for instance, imposes a $2.87 excise tax on each pack of cigarettes. That tax is higher than the national average but much lower than New York’s $5.35 levy. California also imposed a vaping excise tax of 12.5% in 2021.

Of the three ATF product families, firearms have enjoyed an exemption from California excise taxes. Until now.

The Costs Of Gun Violence

Anti-gun advocates have long called for the firearm industry to lose the special treatment it receives, given the harms that firearms cause. The national rate of gun homicides in 2021 was 4.5 per 100,000 people. This is eight times higher than Canada’s rate and 77 times that of Germany. It translates into 13,000 lives lost every year in the U.S.

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Additionally, nearly 25,000 Americans die from firearms suicide each year. This implies a rate of 8.1 per 100,000 per year, exceeding Canada’s by more than four times. Moreover, more people suffer nonfatal firearm injuries than die by guns.

A body lies in a Pearlridge Center parking garage Friday, Dec. 22, 2023, in Honolulu. The deceased is reported to be Theresa Cachuela, 33. Pali Momi Medical Center and Bank of Hawaii Pearlridge were on lockdown. The shooter is currently at large. (Kevin Fujii/Civil Beat/2023)A body lies in a Pearlridge Center parking garage Friday, Dec. 22, 2023, in Honolulu. The deceased is reported to be Theresa Cachuela, 33. Pali Momi Medical Center and Bank of Hawaii Pearlridge were on lockdown. The shooter is currently at large. (Kevin Fujii/Civil Beat/2023)
Police responded to the shooting death of a woman at the Pearlridge Center in December, just a few days before Christmas. (Kevin Fujii/Civil Beat/2023)

Gun deaths and injuries aren’t just tragic — they’re expensive, too. One economist estimated the benefit-cost ratio of the U.S. firearms industry at roughly 0.65 in 2009. That means for every 65 cents it generates for the economy, the industry produces $1 of costs.

And that back-of-the-envelope calculation may be an underestimate. It included the cost of fatal gun violence committed within the U.S. But the estimate didn’t include nonfatal injuries, or the cost of firearm harms occurring outside the U.S. with U.S.-sold weapons.

Mexico Pays A Steep Price For US Gun Trade

America has been called the world’s gun store. No country knows this better than Mexico. The U.S. endured roughly 45,000 firearms deaths in 2019, while the rest of the world combined saw 200,000. Mexico, which shares a long, permeable border with the U.S., contributed 34,000 to that grisly total.

Mexico’s government estimates that 70% to 90% of traceable guns used in crimes seized in the country come from the United States. Other examples abound. For instance, U.S.-sold guns fuel gang violence in a lawless Haiti.

No investor would back such an industry if they were forced to pay its full cost to society. Yet U.S. gun sales have grown fourfold over the past 20 years to about 20 million guns annually, even though they’re now deadlier and more expensive.

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What Alcohol, Tobacco And Firearms Don’t Have In Common

Across the U.S., there’s not a single state where firearms are taxed as much as alcohol and tobacco. I think guns should probably be taxed at a higher level than both of them. That’s because unlike alcohol and tobacco — consumable products that disappear as soon as they’ve been used — firearms stick around. They accumulate and can continue to impose costs long after they’re first sold.

Starting in July, California will tax firearms at about the level of alcohol. But the state would have to apply an excise tax of an additional 26% to equal its effective tax on tobacco.

It’s unclear how the new tax will affect gun violence. In theory, the tax should be highly effective. In 2023, some colleagues and I modeled the U.S. market for firearms and determined that for every 1% increase in price, demand decreases by 2.6%. This means that the market should be very sensitive to tax increases.

Using these estimates, another colleague recently estimated that the California excise tax would reduce gun sales by 30% to 44%. If applied across the country, the tax could generate an additional $1.5 billion to $1.9 billion in government revenue.

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One possible problem will come from surrounding states: It’s already easy to illegally transport guns bought in Nevada, where laws are more lax, to the Golden State.

But there’s some evidence that suggests California’s stringent policies won’t be neutralized by its neighbors.

When the federal assault weapons ban expired in 2004, making it much easier to buy AR- and AK-style rifles across much of the U.S., gun murders across the border in Mexico skyrocketed. Two studies show the exception was the Mexican state of Baja California, right across the border with California, which had kept its state-level assault weapons ban in place.

Gun seizures in Mexico show that all four U.S. states bordering Mexico rank in the top five state sources of U.S.-sold guns in Mexico. But California contributes 75% less than its population and proximity would suggest.

So, California laws seem to already be making a difference in reducing gun violence. I believe the excise tax could accomplish still more. Other states struggling against the rising tide of guns will be watching closely.

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This article is republished from The Conversation under a Creative Commons license. Read the original article.



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California

California coastal agency erodes climate and housing goals

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California coastal agency erodes climate and housing goals


In the midst of a burgeoning environmental movement, California voters in 1972 approved Proposition 20, which created the California Coastal Commission and gave it nearly dictatorial powers over development decisions along the state’s coastline.

Like with most state bureaucracies, Californians have come to accept it as part of the reality of life. Lawmakers have done little, even when the agency abuses its power by, say, fighting a disabled resident’s effort to build a wheelchair-friendly home or quashing a proposed desalination plant over concerns about its impact on plankton. The commission exerts power to reject projects as far as five miles inland.

Over the years, most of the complaints about the commission have come from conservatives and libertarians given the impact of its decisions on private property rights. In 2001, a judge found the agency to be unconstitutional because it wielded executive, legislative and judicial powers. The Legislature reacted quickly by changing the terms of commission appointments – and it has continued along its merry way ever since.

But now the commission is finally getting much-deserved scrutiny from other ideological factions. In recent years, YIMBYs (Yes In My Back Yarders) have battled against NIMBYs (Not In My Back Yarders) over development issues. The former have noted that the latter have used environmental laws to stop housing construction and transit projects that advance the state’s climate goals.

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A new report, “A Better Coastal Commission,” from an urbanist group called Circulate San Diego has launched a direct critique of the Coastal Commission. And while we don’t fully agree with the group’s pro-transit and high-density land-use goals, we believe it makes crucial points about how no-growth rules drive up housing prices by limiting supply. They also force people into longer commutes, thus undermining the state’s climate and transportation goals.

The report rehashes widely known statistics about housing affordability in the coastal zone – and notes that commission regulations significantly increased housing costs in coastal communities. Soaring coastal housing costs, it adds, has a ripple effect on prices even in non-coastal areas. That situation also has led to racial segregation, it explains, with home prices and rents in coastal areas becoming unattainable for large segments of the population.

The researchers provide “numerous examples where the Coastal Commission has resisted, opposed, and delayed the construction of deed-restricted affordable homes. … Similarly, this report documents examples where the Coastal Commission opposes projects that the Legislature encourages as a part of California’s efforts to combat climate change,” including bicycle lanes and infill developments. This offers fodder for YIMBYs who have battled the commission over bills to expand by-right development approvals to the coastal zone.

The commission took umbrage to the allegations, per a San Diego Union-Tribune report. For instance, commissioners argued that most of the highlighted projects ultimately gained approval. However, the Coastal Commission and its no-growth attitudes have no doubt slowed many projects – and discouraged developers from proposing them in the first place. It’s no surprise that regulations that limit development end up limiting the high-density, transit-oriented projects that many people on the Left seem to like.

Our solution is simple: Reduce the commission’s power and respect property rights. Then developments of all sorts can proceed. California might then gain the chance to address a housing-affordability crisis that is spiraling out of control.

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California doctor who drove Tesla off cliff with family inside won’t face trial, granted mental health diversion

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California doctor who drove Tesla off cliff with family inside won’t face trial, granted mental health diversion


The “suicidal” California doctor accused of intentionally driving his Tesla off a cliff with his wife and two young children inside won’t face trial for attempted murder as he is instead set to begin a mental health diversion program.

Dharmesh Patel, who was granted admission into the two-year program last Thursday at the San Mateo County Court, will remain in jail for “several weeks” before he’s released, the San Mateo District Attorney told NBC News.

The radiologist, who has spent the last 18 months behind bars. will be released from jail to his parent’s home where he will be ordered not to leave.

He will also have to report to court weekly for a progress report.

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Patel will be ordered to be tested twice a week “to show medication compliance,” and will have to abstain from drugs and alcohol while also forfeiting his driver’s license and passport, the outlet reported.

Dharmesh Patel won’t face trial for his attempted murder charges after his admittance into a mental health diversion program. David G. McIntyre for NY Post

The doctor will return to court on July 1 where details of his release will be determined, a spokesperson for District Attorney Stephen Wagstaffe told NBC News.

Judge Susan Jakubowski granted Patel admission to the program while the DA’s office “intensely” opposed it.

The radiologist appeared “by all accounts a kind and loving” father, said Jakubowski on Thursday, adding that Patel would be better served in treatment than in jail, the Mercury News reported.

Last week’s ruling was made after evidence was found showing Patel has major depressive disorder.

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Patel was accused of driving his Tesla Model Y off the 250-foot cliff off “Devil’s Slide” on Highway 1 and landing on the shore of the Pacific Ocean in Jan. 2023. AP
Miraculously, Patel, his wife and their two children — a 7-year-old daughter and 4-year-old son — all survived. Facebook/Neha Patel

In April two doctors testified in court that Patel suffered from “major depressive order” and experienced a “psychotic” break during the attempted murder-suicide on Jan. 2, 2023.

The Tesla Model Y plummeted off the 250-foot cliff off “Devil’s Slide” on Highway 1 and landed on the shore of the Pacific Ocean.

Miraculously, Patel, his wife and their two children — a 7-year-old daughter and 4-year-old son — all survived.

Patel was arrested and later charged with three counts of attempted murder. He initially pleaded not guilty to the charges saying the Tesla experienced a malfunction causing the car to careen off the cliff.

His wife Neha later told investigators her husband had suffered from depression before the crash.

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“He’s depressed. He’s a doctor. He said he was going to drive off the cliff. He purposefully drove off,” Neha told rescuers.

During his testimony, psychologist Mark Patterson said Patel’s delusions were provoked by the nation’s fentanyl crisis, the war in Ukraine and feared his children could be kidnapped and molested, which appeared to have been connected to Patel’s worries about accused sex trafficker Jeffrey Epstein.

In May, Neha Patel begged prosecutors to drop the charges and admit her husband into the program.

In April two doctors testified in court that Patel suffered from “major depressive order” and experienced a “psychotic” break during the attempted murder-suicide. AP
Neha Patel later told investigators her husband had suffered from depression before the crash. Facebook/Neha Patel

“We need him in our lives and it has been over a year and a half since my children or I have seen or spoken to Dharmesh,” she said.

The doctor was deemed a good candidate for the program because he’s at low risk of injuring anyone else and has shown progress with his treatment since the crash, Patterson said.

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California Shelves Repeal of 1950 Housing Law That Stoked Racial Tension | KQED

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California Shelves Repeal of 1950 Housing Law That Stoked Racial Tension | KQED


“While SCA 2 was one of many efforts to help address the housing crisis, the November’s ballot will be very crowded, and reaching voters will be difficult and expensive,” Allen said in a statement. “In addition, the legislature recently passed my SB 469, which substantially addresses some of the most significant concerns about how Article 34 might be impacting housing production.”

SB 469 clarifies that the use of state affordable housing dollars does not trigger Article 34’s requirement for voter approval. Allen said his focus is on determining whether these efforts are “making a significant dent in addressing the problem,” adding that quickly building more affordable housing is a priority.

Backed by the California Real Estate Association, the forerunner to the current California Association of Realtors, Article 34 was first adopted by voters in 1950. Realtors played on voters’ fears that affordable housing would lead to greater racial integration of exclusively white neighborhoods.

CAR issued a formal apology in 2022 for its past support of Article 34, with association President Otto Catrina condemning the actions and vowing to address the legacy of its “discriminatory policies and practices.”

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The organization “remains a strong supporter of the repeal of Article 34 … which adds unnecessary hurdles and costs to the creation of affordable housing,” CAR spokesperson Sanjay Wagle said in a statement.

Wagle noted that a majority of Californians support repealing the provision but cited research showing a voter education campaign would be needed to explain the article’s effects.

“The cost of such a campaign in an election year with so many initiatives on the ballot made this campaign more costly and difficult, thus making it more logical to pursue a repeal on a future ballot,” Wagle wrote. “We thank Sen. Allen and Sen. Wiener for their efforts on this repeal effort and look forward to working [with] them and other stakeholders on this issue in the future.”





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