Question

Daniel Patrick Moynihan, the late senator from New York, once introduced a bill that would levy a 10,000 percent tax on certain hollow-tipped bullets. Do you expect that this tax would raise much revenue? Why or why not? Even if the tax would raise no revenue, why might Senator Moynihan have proposed it?

Answer 1

This proposed tax was not meant to raise money, its main purpose was to reduce crimes related to the use of hollow bullets.

The market for hollow bullets is very small compared to other goods or services, and such a huge tax rate would virtually wipe out the market (at least the legal market).