Saturday, December 22, 2012

Did the Assault Weapons Ban Work?

Did the Assault Weapons Ban Work?

As noted in this article, the Sandy Hook Elementary School shooting in Newtown, Connecticut has brought calls to reinstate an assault weapons ban like the one that expired in 2004. Following is an excerpt of a round table discussion of the shooting on the December 16th edition of This Week With George Stephanopoulos:

WILL: In 1996, a man went into a gym class in Scotland, killed 16 5- and 6-year-olds and the teacher. A few years ago in Norway, a young -- deranged young man killed, what, 69 people on an island, mostly teenagers. Connecticut has among the toughest gun laws in this country. Didn't help. Scotland and Norway have very tough gun laws. Didn't help. So...

STEPHANOPOULOS: Didn't stop, but it does lessen the occasion of violence, doesn't it?

WILL: Yeah, why don't...

EDWARDS: And, George, since Columbine, there have been 181 of these school shootings.

WILL: We did -- remember, we did -- we did have a ban -- we did have a ban on assault weapons. When we put the ban in place, these incidents did not really decline in a measurable way. And when we took it off, they didn't increase in a measurable way.

Hence, George Will is saying that the ban on assault weapons did not have a measurable effect on these mass-shootings. On the December 17th edition of The PBS Newshour, David Kopel, a professor at the University of Denver, was more explicit, saying the following:

Well, I think we can look at what happened when she had her 10-year in the past. The Congress, when it enacted that ban, also ordered that a formal study be done of the results of it.

The study was performed by the Urban Institute, a very well-respected, somewhat left-leaning think tank in Washington, D.C., and the Urban Institute reported that it had no effect on homicide rates. There was no statistically significant benefit in terms of saving lives.

Kopel's statement that the study had reached such a definitive conclusion sounded a little surprising. Looking online, I found the Urban Institute study titled Impact Evaluation of the Public Safety and Recreational Firearms Use Protection Act of 1994 - Final Report. The overview of the study concludes as follows:

At best, the assault weapons ban can have only a limited effect on total gun murders, because the banned weapons and magazines were never involved in more than a modest fraction of all gun murders. Our best estimate is that the ban contributed to a 6.7 percent decrease in total gun murders between 1994 and 1995, beyond what would have been expected in view of ongoing crime, demographic, and economic trends. However, with only one year of post-ban data, we cannot rule out the possibility that this decrease reflects chance year-to-year variation rather than a true effect of the ban. Nor can we rule out effects of other features of the 1994 Crime Act or a host of state and local initiatives that took place simultaneously. Further, any short-run preventive effect observable at this time may ebb in the near future as the stock of grandfathered assault weapons and legal substitute guns leaks to secondary markets, then increase as the stock of large-capacity magazines gradually dwindles.

We were unable to detect any reduction to date in two types of gun murders that are thought to be closely associated with assault weapons, those with multiple victims in a single incident and those producing multiple bullet wounds per victim. We did find a reduction in killings of police officers since mid-1995. However, the available data are partial and preliminary, and the trends may have been influenced by law enforcement agency policies regarding bullet-proof vests.

The following pages explain these findings in more detail, and recommend future research to update and refine our results at this early post-ban stage.

This sounds very different from Kopel's definitive "no statistically significant benefit in terms of saving lives". Yes, they were "unable to detect any reduction to date in two types of gun murders that are thought to be closely associated with assault weapons" but they did detect a "6.7 percent decrease in total gun murders between 1994 and 1995" and a "reduction in killings of police officers since mid-1995". It is important to note that this study was published on March 13, 1997, just over two years after the ban took affect on September 13, 1994. Hence, the study itself recommends "future research to update and refine our results at this early post-ban stage".

In fact, two additional studies that were done are referenced at this link. Like the Urban Institute study, key authors were Christopher S. Koper and Jeffrey A. Roth. The latter of the two is titled An Updated Assessment of the Federal Assault Weapons Ban: Impacts on Gun Markets and Gun Violence, 1994-2003 and was published in June 2004. Following is an excerpt from its first chapter titled "Impacts of the Federal Assault Weapons Ban, 1994-2003: Key Findings and Conclusions":

The Ban’s Success in Reducing Criminal Use of the Banned Guns and Magazines Has Been Mixed

• Following implementation of the ban, the share of gun crimes involving AWs [assault weapons] declined by 17% to 72% across the localities examined for this study (Baltimore, Miami, Milwaukee, Boston, St. Louis, and Anchorage), based on data covering all or portions of the 1995-2003 post-ban period. This is consistent with patterns found in national data on guns recovered by police and reported to ATF.

• The decline in the use of AWs has been due primarily to a reduction in the use of assault pistols (APs), which are used in crime more commonly than assault rifles (ARs). There has not been a clear decline in the use of ARs, though assessments are complicated by the rarity of crimes with these weapons and by substitution of post-ban rifles that are very similar to the banned AR models.

• However, the decline in AW use was offset throughout at least the late 1990s by steady or rising use of other guns equipped with LCMs [large capacity magazines] in jurisdictions studied (Baltimore, Milwaukee, Louisville, and Anchorage). The failure to reduce LCM use has likely been due to the immense stock of exempted pre-ban magazines, which has been enhanced by recent imports.

It is Premature to Make Definitive Assessments of the Ban’s Impact on Gun Crime

• Because the ban has not yet reduced the use of LCMs in crime, we cannot clearly credit the ban with any of the nation’s recent drop in gun violence. However, the ban’s exemption of millions of pre-ban AWs and LCMs ensured that the effects of the law would occur only gradually. Those effects are still unfolding and may not be fully felt for several years into the future, particularly if foreign, pre-ban LCMs continue to be imported into the U.S. in large numbers.

Hence, the study states that gun crimes involving AWs [assault weapons] did decline, primarily due to a reduction in the use of APs [assault pistols]. However, this decline was offset by steady or rising use of other guns equipped with LCMs [large capacity magazines]. The study concludes that "the ban’s exemption of millions of pre-ban AWs and LCMs ensured that the effects of the law would occur only gradually". Once again, this sounds very much different that Kopel's statement that the assault weapon ban provided "no statistically significant benefit in terms of saving lives".

This points to a problem with interviews on news shows, even excellent shows like the PBS Newshour. It is very easy to make many types of erroneous statements with little risk of having the errors exposed, at least not in real time. Even though there may be one or more experts with opposing views, none of them will have all of the facts of all studies at their fingertips. It is therefore easy to slip in various erroneous numbers or conclusions with little risk of being contradicted. This suggests that it might be useful to have similar interviews online where each statement could subjected to some minimal fact-checking before the conversation continues. In any case, it shows that such statements should be treated simply as possibilities unless and until they can be verified.

Note: There is a discussion of this post at this link.

Did the Assault Weapons Ban Work? (Part 2).

Sunday, December 2, 2012

Do Any Studies Show that Tax Cuts Pay For Themselves?

I concluded a prior post with the following statement:

As I mentioned, I am yet to find a single economic study that purports to show evidence that any income tax cut has ever paid for itself. If anyone who reads this should know of one, please leave a comment with a link to that study. Thanks.

I did receive a couple of replies to that request but neither of them focused on income tax cuts in the United States. One focused on capital gains tax cuts and the other focused on countries with relatively weak tax authorities where tax cuts might increase compliance (like Russia). In any case, I replied to both. I also have not found an economic study that shows an income tax cut paying for itself from any other source. However, I am continuing to search for such a study and have posted links to any related information that I've found at this link. I believe that only one of those links is to a study that purports to show a tax cut that paid for itself. It is a paper published by Laffer Associates titled The Onslaught From The Left, Part III: The Capital Gains Tax. Following is an excerpt:

We now have at least three years of data to assess the effect of the 2003 capital gains tax rate reduction on capital gains tax receipts. Figure 6 shows that from 2002 through 2005, capital gains receipts have doubled, from $49 billion to $97 billion. The latest projection for receipts in 2006 is $110 billion. This represents a 124% increase in revenues over four years with a 25% cut in tax rates. You can’t ask for more than that.

As stated, this paper involves a capital gains tax cut and looks at just 3 years worth of data. Figure 2 on page 4 of this Congressional Research Service paper shows that capital gains tax receipts sank back toward their 2002 level in the 2009 financial crisis.

In any event, I took those studies that gave actual numbers for the estimated revenue recouped following tax cuts and compiled them into a table at this link. Following is that table:

Estimates of the Percent of Revenue Cost Recouped after Tax Cut

Labor 
Taxes 
Capital 
Taxes 

Author (s)

Title 

Date 

Notes 
17-25*   Lindsey, Lawrence  Individual Taxpayer Response to Tax Cuts 1982-1984 with Implications for the
Revenue Maximizing Tax Rate
 
11/86  * 1982-1984 
33*   Lindsey, Lawrence  The Growth Experiment  10/91  * according to 
Bartlett
17 50  Mankiw, Gregory 
Weinzierl, Matthew 
Dynamic Scoring: A Back-of-the-Envelope Guide  12/04   
-5 to 
32* 
  Congressional Budget 
Office 
Analyzing the Economic and Budgetary Effects of a 10 Percent Cut in Income Tax Rates  12/01/05  * for 2nd 5 years 
< 10*   Treasury Department  A Dynamic Analysis of Permanent Extension of the President’s Tax Relief  7/25/06  * according to 
CBPP
30*   Foertsch, Tracy 
Rector, Ralph A. 
A Dynamic Analysis of the 2001 and 2003 Bush Tax Cuts: Applying an Alternative 
Technique for Calibrating Macroeconomic and Microsimulation Models
 
11/22/06  * 295.5 / 991.9 
39*   Auten, Gerald 
Carroll, Robert 
Gee, Geoffrey 
The 2001 and 2003 Tax Rate Reductions: An Overview and Estimate of the
Taxable Income Response
 
9/08  * reduction in 
top 2 rates 
32 51  Trabandt, Mathias 
Uhlig, Harald 
How Far Are We From The Slippery Slope? The Laffer Curve Revisited  4/10   

As can be seen, none of the studies projected that tax cuts would pay for themselves. At most, they projected that about a third of the cost of labor taxes and half of the cost of capital taxes would be recouped. In fact, the CBO study suggests that the feedback could actually be negative, causing the revenue loss to be larger than the static revenue loss. Following is a summary of the study given by Bruce Bartlett:

A 2005 Congressional Budget Office study during the time that Republican Doug Holtz-Eakin was CBO director concluded that a 10 percent cut in federal income tax rates would recoup at most 28 percent of the static revenue loss over 10 years. And this estimate assumes that taxpayers have unlimited foresight and know that taxes will be raised after 10 years to stabilize the debt/GDP ratio. Without foresight and no compensating tax increases or spending cuts, leading to an increase in the debt, feedback would be negative; i.e., causing the revenue loss to be larger than the static revenue loss.

This seems to agree with the study by Christina and David Romer that I mentioned in my prior post that found that "deficit-driven tax increases" have had a positive effect on economic growth. In any case, I am interested in any studies that give estimates for the revenue cost recouped following tax cuts. This especially applies to any studies that suggest that an income tax cut in the United States would pay for itself. As mentioned, I am yet to find such a study.

Note: There is a discussion of this post at this link.

About Me

I became interested in U.S. budget and economic matters back in 1992, the first time that I remember the debt becoming a major issue in a presidential election. Along with this blog, I have a website on the subject at http://www.econdataus.com/budget.html. I have blogged further about my motivations for creating this blog and website at this link. Recently, I've been working on replicating studies such as the analysis at this link.

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