At what point does a tax become a ban?

Question

I believe that it is mostly uncontroversial that it is constitutional for a state to tax firearm purchases at a reasonable rate. If a state had a law imposing a 10% sales tax on all firearm and ammunition purchases, this might be politically controversial, but I believe that most people would accept that the law is constitutional.

What if the tax rate is set to 50%? 100%? 1000%? Above a certain point, I would expect that an extremely high tax would be seen as equivalent to a ban. It would be a major loophole in the Second Amendment if the government could say "sure, you can buy that gun for $1,000, but only after you pay $1,000,000 in taxes." At what point are sales taxes on constitutionally protected sales unconstitutional?

(I'm using firearms as an example, but the question applies equally to any case in which something can be taxed but not banned.)

Answer 1

States have the power to impose fines for engaging in prohibited behavior, which fines may not be excessive under the 8th Amendment. Possession of firearms is not outlawed and therefore cannot subject to a fine. In the case of a criminal penalty, we can determine that a $114,948 fine for illegally smuggling $114,948 is not excessive, see US v. Jose, 499 F.3d 105. That is, there is no specific dollar amount that is deemed to be legally "excessive".

Since we are dealing with an enumerated constitutional right, the restriction (tax) is subject to strict scrutiny. There is no "legitimate government interest" in prohibiting sale of firearms, instead the justification must be something else (let's say "firearms safety education"). An excise tax can be imposed, just as there are additional taxes on alcohol, tobacco and marijuana. Tobacco taxes are on a unit basis, but can approach 100%. See New York State Assn. of Tobacco & Candy Distribs., Inc. v City of New York for a challenge (which failed). The problem, as stated in Magnano Co. v Hamilton, 292 US 40, is that

Collateral purposes or motives of a legislature in levying a tax of a kind within the reach of its lawful power are matters beyond the scope of judicial inquiry. Nor may a tax within the lawful power of a state be judicially stricken down under the due process clause simply because its enforcement may or will result, in restricting or even destroying particular occupations or business

The argument about the tax would therefore have to reduce to a clear unconstitutional restriction on the individual's Second Amendment rights, and not the amount per se.