Why the National Firearms Act of 1934 taxed guns instead of banning them

Congress wanted to control machine guns in 1934, and it did not pass a law that said "machine guns are restricted." It passed a tax law. If you have ever wondered why buying a suppressor has meant a federal "tax stamp" and a pile of paperwork from an agency descended from the tax collectors, this is the reason: when Congress wants to do something it is not sure it has the power to do, it finds a power it is sure about, and sends a bill.

The power Congress was sure about was the power to tax. It is the oldest trick in the federal toolbox. And the story of how it was used in 1934, and what the Supreme Court did with it afterward, is a tidy lesson in constitutional design, in the politics of fear, and in the way a law written for one era is still shaping your rights ninety years later.

The decade of the Tommy gun

Start with the world that produced the bill. Prohibition began in 1920, when the 18th Amendment took effect, and it handed organized crime the most profitable product in American history: illegal liquor. Gangs fought over territory, and the weapon that came to symbolize the fighting was the Thompson submachine gun, a fully automatic firearm that a man could carry under a coat.

Two events burned themselves into the public mind. The first was the St. Valentine's Day Massacre in Chicago on February 14, 1929, in which seven men were shot dead in a garage, in a killing associated with the gang war that surrounded Al Capone. The second was the Kansas City Massacre on June 17, 1933, when gunmen tried to free a prisoner, Frank Nash, at Union Station and killed four law enforcement officers along with Nash himself. The public wanted action, and Prohibition itself was nearly over: the 21st Amendment repealed the 18th on December 5, 1933.

Notice the odd timing. The country had just decided that banning liquor was a failure. It was not eager to repeat the experiment with something else. That is one reason the drafters looked for a different tool.

Cummings and the plan

President Franklin Roosevelt's Attorney General was Homer Cummings, an energetic lawyer who made crime his signature issue. In 1933 and 1934, the administration pushed a package of anti-crime bills, and the firearms measure was one of them. Cummings's idea was national registration and heavy regulation of certain weapons.

The first draft was broader than the final law. The original bill reached handguns, pistols and revolvers, with the same tax and registration rules as machine guns. That provision did not survive. Opposition from sportsmen, from gun owners and from the National Rifle Association, which testified at the hearings in the House, helped get the handgun provisions stripped out of the bill. What remained was a narrower list: machine guns, short-barreled rifles, short-barreled shotguns, silencers, and a catch-all category of "any other weapons" (a category that covered disguised firearms like a pen gun or a cane gun). The final list is the one the ATF administers today, with additions made in 1968.

The act was signed on June 26, 1934.

Why a tax? The constitutional puzzle

This is the part that confuses most readers, so let me slow down.

In 1934, Congress did not think it had the power to regulate firearms directly. The Constitution lists the powers of Congress in Article I, Section 8, and "regulate guns" is not among them. The power to regulate interstate commerce is there, but the Supreme Court of the time read it narrowly. The Court would not begin to expand it until the late 1930s, and it would not adopt its very broad reading until Wickard v. Filburn in 1942. (The story of that decision is in A Farmer's Wheat Crop and the Long Fight Over the Commerce Clause.) Policing crime was understood as a job for the states. And the Second Amendment, in the minds of the drafters, was a reason for caution.

So the lawyers looked for a power they could be certain of. The Constitution begins its list in Article I, Section 8, with the power "to lay and collect Taxes, Duties, Imposts and Excises." Congress had always taxed things for revenue, and it had often taxed things to discourage them. The tax law was constitutionally safe in a way that a ban was not.

The design had two parts.

1. A tax. A $200 tax on each transfer of a machine gun, short-barreled rifle, short-barreled shotgun, or silencer. A $1 tax for items in the "any other weapons" category. A special occupational tax on those who made or sold the covered items.
2. A registry. The tax could only be paid through a process that registered the weapon with the Treasury Department: its maker, serial number and owner. The registration was the real enforcement mechanism.

Two hundred dollars in 1934 was a very large sum for most families in the middle of the Depression. The rate was set so that the tax would work as a barrier to casual ownership. In other words, the tax was a regulation wearing a revenue costume. Everybody involved knew it, and the courts said that was fine.

The administering agency was part of the Treasury, in the unit that collected taxes on alcohol, which is why the ATF's family tree begins there. (See What the ATF is, what it can do and why gun owners distrust it.)

The Court says yes: Sonzinsky

The first big test came three years later. A Chicago dealer named Sonzinsky was charged with failing to pay the Act's occupational tax on dealers in firearms. He argued that the tax was not a tax at all but a disguised attempt to regulate local activity the federal government had no power to regulate.

In Sonzinsky v. United States, decided in 1937, the Supreme Court rejected the argument. Justice Harlan Fiske Stone, writing for the Court, held that the tax was a valid exercise of the taxing power. A tax does not stop being a tax because it has a regulatory effect, or because it is heavy, the Court said. It would not look behind the label to examine the motive of Congress.

Think about what that holding means. It means that the power to tax carries the power to regulate, so long as the measure raises or could raise revenue. That reasoning would come back in much later fights. In 2012, in NFIB v. Sebelius, the Court upheld the Affordable Care Act's individual mandate as an exercise of the taxing power after finding it could not be sustained under the Commerce Clause. (See NFIB v. Sebelius Lost the Mandate Fight but Won a Limit on Federal Strings.) The idea that a "penalty" can be a "tax" is the grandchild of the logic of 1934.

The Court speaks on the Second Amendment: Miller

The Second Amendment case came in 1939. Jack Miller and Frank Layton were charged with transporting an unregistered short-barreled shotgun, with a barrel less than eighteen inches, from Oklahoma to Arkansas, without the registration and stamp the law required. A federal district judge dismissed the charge on the ground that the National Firearms Act violated the Second Amendment. The government appealed directly to the Supreme Court.

In United States v. Miller, decided March 30, 1939, the Supreme Court reversed. Justice McReynolds wrote that, in the absence of any evidence that a short-barreled shotgun had some reasonable relationship to the preservation or efficiency of a well regulated militia, the Court could not say that the Second Amendment guarantees the right to keep and bear such an instrument. The Court then surveyed the history of militia arms, as it understood it.

Two features of Miller are worth remembering. First, the Court sent the case back without deciding the weapon's status as a matter of fact. It simply said that nothing in the record showed that this weapon had a militia use. Second, the case was argued with only one side present. Miller and Layton had no lawyer before the Supreme Court. No brief was filed on their behalf. The Court heard the government and no one else, and it wrote its opinion on a thin record. That is a shaky foundation for seventy years of argument.

How Heller read Miller

For decades the lower courts treated Miller as proof that the Second Amendment protected only a right connected to militia service. In 2008, in District of Columbia v. Heller, Justice Scalia read the case differently, and in my opinion more accurately. (See Why Heller got it right and the 'militia only' reading falls apart.)

Here is the Heller analysis in outline.

1. Miller did not hold that the right depends on membership in a militia. It asked whether the particular weapon was one the amendment protects.
2. The Court in Miller was concerned with whether a short-barreled shotgun had been shown to be a weapon of the kind in ordinary military or lawful use. It was not asking whether the defendants belonged to a militia.
3. The best reading, Scalia wrote, is that the amendment protects weapons in common use for lawful purposes, and that the historical tradition of prohibiting dangerous and unusual weapons is consistent with that.
4. The result is that Miller is consistent with an individual right. And the machine gun and short-barreled shotgun provisions of the NFA were left standing.

Heller did not strike down the National Firearms Act. It said nothing to cast doubt on its core, and many courts have continued to uphold it. If you read the NFA as a restriction on what Heller calls "dangerous and unusual" weapons, you can see why. If you read it as a tax, as Congress did, you can see why too. Either way, the law survived, and the question of how far the "in common use" test reaches is still being argued. (The modern test is explained in Bruen and Rahimi explained, the history test every gun law now faces.)

Three things people get wrong about the Act

• It did not ban machine guns. It taxed and registered them. A person who passes the process can lawfully own a covered item, subject to later laws, including the 1986 limit on new machine guns.
• It did not tax ordinary guns. The common rifle, shotgun and handgun were outside the Act after the handgun provisions were cut. That is a major reason why gun owners at the time did not unite against it.
• It was not a gun grab. The drafters thought they were taking the most gangster-friendly weapons out of easy circulation. Whether the choice of a tax and a registry was wise is a fair argument. Calling it a confiscation law is not.

Getting these right matters because modern debates borrow the 1934 model. When someone proposes a new tax or registration scheme for a category of firearm, you can now ask the right questions: what is the real purpose, what power does Congress claim, and does the tax-and-registry device work as a ban in disguise?

What happened to the Act afterward

The National Firearms Act has been amended several times, and its history shows how Washington tinkers.

• 1968. The Gun Control Act amended the NFA to add "destructive devices," such as certain explosives and large-bore weapons, to the covered list, and made other changes. (See Inside the Gun Control Act of 1968 and the rules you still follow today.)
• 1986. The Firearm Owners Protection Act banned civilian possession of machine guns manufactured after its effective date in May 1986, freezing the legal supply to guns already on the registry. That is why transferable machine guns are scarce and expensive: no new ones can be added to the pool. (See How the 1986 Firearm Owners Protection Act passed with a machine gun ban.)

Notice an irony. The 1934 law was a tax. The 1986 law was a ban, in the form of a prohibition added to the criminal code. A ban of the kind Congress hesitated to enact in 1934 arrived fifty-two years later.

What it means for the rest of us

There are two lessons here, and one of them cuts against the grain of what you might expect from a conservative.

The first lesson is the one every limited-government conservative should memorize. When you give the federal government a power for one purpose, it will be used for another. The taxing power was granted to raise money to run the country. It was turned into a regulatory instrument in 1934, and the Court allowed it. The Constitution's list of powers is only a fence if the courts hold the fence up. That is the core of Congress Can Only Do What the Constitution Lists and Madison Said So.

The second lesson is quieter. The law as written is not the law as it is applied. A suppressor today is a piece of hearing protection that is legal in a great many states, and the Act that regulates it was aimed at gangsters in the 1930s. Rules written in a panic tend to outlive the panic. When Congress acts quickly after a tragedy, it is wise to ask what the rule will do in a hundred years.

The bottom line

• The National Firearms Act was signed on June 26, 1934, after Prohibition-era gang violence and the Kansas City Massacre of 1933. It taxed and registered machine guns, short-barreled rifles and shotguns, silencers and "any other weapons."
• Congress used the taxing power because it doubted it could ban or regulate the weapons directly. The $200 transfer tax was a barrier dressed as revenue, and the registry did the real work.
• Sonzinsky (1937) upheld the tax. Miller (1939) turned on whether a short-barreled shotgun had a militia use, and Heller (2008) read it as a case about the kind of weapon.
• The lesson for conservatives: a power granted for one purpose will be used for another. Hold Congress to the list in Article I.
• If you own, or want to own, an NFA item, follow the process exactly, keep every approved form, and check the current rules at the ATF's website before you buy or transport anything.