October 25, 2014 § Leave a comment
Lots to argue with in a Forbes article here that attacks marijuana taxation:
1. “It’s a basic principle of sound tax policy that the code should not pick winners and losers or disproportionately target certain industries or groups of taxpayers.” There’s a grain of truth there, but pushed to this extreme, it leads to taxing whiskey like wheat, and marijuana like milk.
2. “Because marijuana can be purchased as a cigarette, an edible, a liquid, or vapor, all with a wide variety of concentrations, a specific excise tax is untenable.” That’s a complete red herring. No one else suggests taxing weight or potency at the product level. That would be like taxing rum punch like vodka shots. Just as you tax the rum in rum punch, not the punch product, you would tax the marijuana that goes into edibles and so on, not the final product.
3. “There is no reason why the tax code should deny ordinary and necessary business expenses to legitimate businesses established under state law.” Well, you might think advertising and marketing of marijuana might be (a) unwelcome on policy grounds and (b) protected under some reading of free speech. Denying deductions for those expenses might be the best you can do. More here.
October 13, 2014 § Leave a comment
Ed Kleinbard’s book starts with a free-market slant (much of the following is paraphrased):
Private enterprise ≈ path to greater national wealth and is conducive to the preservation of personal liberties.
And doesn’t oppose regressive taxes:
Surprisingly, the progressivity of tax rates is negatively correlated with the reduction in inequality a country achieves.
But moves on to blast anti-tax hysteria: « Read the rest of this entry »
September 22, 2014 § Leave a comment
Rosemary Habib is the author, along with Reuben Finighan and Steven Davenport, of “Testing for Psychoactive Agents,” BOTEC Analysis Corp., http://liq.wa.gov/publications/Marijuana/BOTEC%20reports/1c-Testing-for-Psychoactive-Agents-Final.pdf (Aug. 24, 2013), which seems to me by far the leading analysis of that topic done to date. She graciously agreed to let me print her thoughts about the bud-trim line for a marijuana tax.
Updating http://newrevenue.org/2014/05/12/can-the-bud-trim-line-hold/: Let’s say there’s a huge tax on bud and a small tax on trim. Would that give producers an incentive to cheat – to shift bud, at the margin, just a little, into the trim category and then use it to make concentrates?
Might not a tax-evader deliberately characterize bud as trim to boost the THC content – and thus value – of concentrates? That evasion depends on the purchaser believing that he is getting a better, more valuable product — edible, vaporizer cartridge, or whatever. And that belief would need to come from THC labeling (however inaccurate) or some other claim or experience or report.
Rose Habib’s response:
My first impression is, yes it could be more economical to move lesser buds over into the trim pile. A lot of that depends on the market. « Read the rest of this entry »
September 17, 2014 § Leave a comment
This document freezes producer marijuana taxes through the end of 2014: Average market rate late 2014.
September 14, 2014 § Leave a comment
These bills sometimes disappear. Here is the text of New York State Senator Liz Krueger’s bill imposing “an excise tax of $50.00 per ounce on marihuana and $50.00 per quarter ounce of concentrated cannabis.” http://open.nysenate.gov/legislation/bill/S6005-2013 Accessed 14 September, 2014.
BILL NUMBER:S6005 « Read the rest of this entry »
September 14, 2014 § Leave a comment
Several posts here have looked at whether taxing bud at one rate and trim at another is viable.
One argument that the line is self-enforcing, as bud is smoked and trim made into concentrates. But even without a tax incentive to put bud in the trim pile, businesses do just that. Here is an ad, downloaded 14 September 2014, promising concentrates made from . . . ALL BUD NO TRIM! « Read the rest of this entry »