With the Senate Parliamentarian having ruled that suppressors can’t be removed from the NFA through the reconciliation process, it looks like possibility #2 from our newsletter a few weeks ago is happening:
If the Parliamentarian rules against full removal from the NFA, the bill contains a much-more-likely-to-be-allowed-through-reconciliation provision dropping the NFA tax on suppressors from $200 to 0. Think of that as a permanent ~25% discount on all suppressors. It would produce an initial spike in sales which would settle into a sustained baseline level of sales that’s somewhat higher than today’s — demand curves slope downward, and you’ll sell more of something when it costs $x – 200 instead of $x. It also opens the door somewhat (although not quite as much as outcome #1) to bargain-basement suppressor designs. The downside is that it risks making suppressor regulation seem like “just” some paperwork. That could take some wind out of the sails of long-term NFA reform. On net it’s still a positive development that would further entrench suppressors.
What does that mean for the silencer market?
Let’s do the math, starting with some estimates we made previously:
The ATF hasn’t released recent data on the number of Form 4’s they’ve processed, but we can estimate it. They did release this chart:
That data counts each NFA item multiple times, since for example a silencer might have 1-2 Form 3’s and then a Form 4 before it gets into your hands. But if we assume the relative changes year to year in the total number of forms processed also reflect the relative change in the number of Form 4’s processed, we can add guesstimates for 2021 through 2023 to our previous graph:
So for every silencer that was sold in 2016, three were sold in 2023.
Another way to think of that: more silencers were sold from 2020 to 2023 than in the previous 30 years combined.
Another way to think of that: as of May 2021, there were 2.6 million silencers in the NFRTR, the ATF’s registry of NFA items. That number includes all silencers owned by both consumers and state and local law enforcement. Even if sales (implausibly) stay completely flat after 2023, consumers are buying enough to replace every silencer in the NFRTR — including all of those owned by police — every 8.67 years.
Sales in 2024 were up 80% versus 2023, driven by a massive drop in eForm 4 wait times. (People are getting their tax stamps in days or even hours in some cases.) So that’s the baseline the industry is operating from. If the price of a tax stamp drops from $200 to 0, what will that do to baseline demand?
We can model that. There are benchmarks for price elasticity of demand (PED), which is a multiplier that tells you how big an impact on demand you’ll see from every 1% change in price. These are generalizations, but they give you a rough sense of things. Liquor’s PED is -1.5, which means that every 1% decrease in price gives you a 1.5% increase in demand. Rice is less price-sensitive, with a PED of -0.55. That means every 1% decrease in price gives you just a 0.55% increase in demand. Coca-Cola is more price-sensitive, with a PED of -3.8. And so on.
So you just need to pick which goods silencers behave like. They’re not classic luxury goods, which have relatively high PEDs, but they’re also not staples that the marginal consumer is dead set on buying. They’re somewhere in the middle. Let’s set the PED right at -1.
A $200 decrease in the price of silencers works out, if you assume an average selling price of $800, to a 20% decrease in the overall price of buying a silencer. So at a PED of -1, you’d expect demand to increase by 20%.
Our estimates above work out to 540,000 silencers sold in 2024. Assume sales drop a bit in 2025, to account for the likelihood that the 2024 frenzy just pulled forward some sales instead of really being a new floor for the industry. So suppose we land at 500,000 silencers sold in 2025. A 20% bump on that with $0 tax stamps would mean 600,000 silencers sold in 2026. And it’s important to keep in mind that that’s not a one-off driven by a political scare or a buy-one-get-one-free sale. That’s a permanent 20% increase in baseline demand, year after year.
That “year after year” bit is key, because the market will evolve. This isn’t just a price change in a static market. There are new segments to open up.
Cheap silencers have had a really hard time justifying their existence. We can use the PED lens to guesstimate the numbers. For a $250 silencer, the $200 tax stamp increases the price by 80%. At a PED of -1, that means an 80% drop in demand. A generalization, but it illustrates that at some point the market just isn’t viable. When demand drops enough, you don’t have enough of a customer base to survive. Cheap silencers have been in that zombie mode since the passage of the NFA.
A solid grade 5 titanium rod with the same dimensions as a typical rifle can costs about $300 at McMaster. With those kinds of raw material costs, cans made from exotic materials will be priced in the upper triple digits for the foreseeable future. But there will also be all kinds of aluminum and steel innovation in the low triple digits. That’s going to be the fastest growing part of the industry, and it’ll birth some new silencer startups. The dangers of $0 tax stamps aside, we’re excited to see it.
A hopefully-not-prescient piece. The whitepill here is that violence is gated on people’s willingness to commit it, not their (already very high) ability to commit it. There could be a lot more violence in the world than there is, and the reason there isn’t is that people don’t want to do it.
Joseph the Parrot, also known as Zé Carioca, designer of the Urutau—one of the most advanced and ideologically charged 3D-printed firearms to date.
Visibly nervous, Carioca stepped forward amid a surreal convergence of crypto-anarchism, libertarian resistance, and underground firearms engineering. His speech blurred the lines between technology, ideology, and extreme libertarian politics, opening with a bold comparison:
3D-printed firearms, like cryptocurrency, are decentralized responses to entrenched state monopolies — one on currency, the other on violence.
H/t Discord sub Superlincoln
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The 0$ tax stamp has a lot of downside potential - in that it leaves all the "can't work on your own can" and "suppressor parts require registration" while removing the incentive for quick and efficient form 4 processing. I fear this will be worse than nothing if we see wait times going back up and nothing but the whim of the agency standing between the cheap suppressor customer and a prison sentence.
If the $0 Tax Stamp comes through, someone enterprising will come out with a simple but effective $60 can intended as a consumable and turn the market on its head.
The 0$ tax stamp has a lot of downside potential - in that it leaves all the "can't work on your own can" and "suppressor parts require registration" while removing the incentive for quick and efficient form 4 processing. I fear this will be worse than nothing if we see wait times going back up and nothing but the whim of the agency standing between the cheap suppressor customer and a prison sentence.
If the $0 Tax Stamp comes through, someone enterprising will come out with a simple but effective $60 can intended as a consumable and turn the market on its head.