How We Subsidize the Gun Epidemic

By Kasia Tarczynsla

June 7, 2022

gun in America

While the country mourns yet another mass shooting, one sad, obscure truth in this debate is the fact that the companies producing weapons are being subsidized by communities across the country. While a full accounting of how much the public gifts to gun makers is hampered by poor transparency practices, we know for sure that the companies have received millions of dollars, often just to relocate.

One of them is Daniel Defense, whose assault rifles were used to kill 19 children and two teachers in the May 24 massacre in Uvalde, Texas, and also in the Las Vegas massacre that stole 60 lives in 2017.

Daniel Defense, formed in 2000, is headquartered in Black Creek, a small community outside of Savannah, Georgia. When the company expanded in Jasper County, South Carolina in 2011, it received an assortment of public subsidies*: local property tax breaks, state grants, money to train its workers, and another grant which allowed the company to keep workers’ withholding taxes. Also, two earlier federal loans totaling over $2.7 million supported the company’s growth.

Six years later, the company closed the South Carolina facility and moved next door to Georgia. Once again, the company benefited from public money – more tax breaks as well as a road that was built for the company with over $400,000 in local and state funds.

In both Georgia and South Carolina, subsidy transparency is so poor we can’t tell exactly how much of the public’s money was transferred to the private gunmaker.

Most recently, Daniel Defense received over $3 million from the Paycheck Protection Program (PPP), the federal stimulus program created in 2020 when the pandemic first hit.

Disturbingly, many large subsidies came after the 2012 school massacre in Newtown, Connecticut, where the 26 dead included 20 first graders. When legislators in Connecticut and other northeastern states dared to pass common-sense gun ownership regulations, firearm makers let it be known they wanted to move to states that would allow their guns to be sold with as few restrictions as possible – no background checks, no training, no wait times, no questions. Southern states launched a bidding war to lure the companies.

Many large gun manufacturing companies benefit from public money:

  • Remington had a long presence in New York state where it received a minimum of $5 million in public money. In 2014, the gun maker moved a production plant from New York to Alabama for which it received $68.9 million. When the company didn’t meet its job creation obligations, it had to repay some money to local communities in Alabama. The gun maker’s spotty performance did not prevent Georgia from extending in 2021 an unspecified amount of tax breaks and grants when the company moved its headquarters there from New York (the company had filed for bankruptcy in 2018 and 2020 and was broken into two companies, one that makes guns and one that makes ammunition). Over the years, the company has received another $19 million in subsidies from various other states such as Kentucky, North Carolina, and Arkansas. Due to various transparency shortcomings, we can’t tell the full total, which is likely significantly higher. Remington also benefited from the federal PPP program, receiving the maximum amount of $10 million.
     
  • In 2013, Sturm, Ruger & Co. decided to leave New Hampshire and open a facility in North Carolina, extracting at least $14 million from Tar Heel residents. It took another $600,000 from them when it expanded in 2020. And in Arizona, it seems, that the company has not been paying full property taxes since 1964.
     
  • In 2021, Smith & Wesson got a $9 million grant from Tennessee to move office jobs from Massachusetts, after the Bay State proposed banning production of the type of assault rifles that allow for rapid murders. Maryville, the new location, provided the company with 40% property tax abatements.

If gun companies were moving, as they claimed, due to unfriendly regulations – then why is the public subsidizing their moves? We’ve long argued public money should not subsidize moves that would have happened anyway.

To attract smart people and promising businesses, communities need good infrastructure, a skilled labor force, and high-quality schools; in other words, good public services supported by sufficient tax dollars. They also need good quality of life.

But stability and quality of life are the opposite of what guns have brought to Uvalde, Newtown, Buffalo and Columbine.

 

* Stice, A. (2011, July 5). Firearms manufacturer to open Ridgeland plant. The Island Packet. Via LexisNexis