Staging Marijuana Taxes

September 26, 2016 § Leave a comment

Here’s how to start low and go slow: Not just phase-ins of rates, but staged effective dates for each new excise tax or tax base, one by one—that’s the insight from the Hoover Institution’s Alvin Rabushka’s enormous Taxation in Colonial America, now discounted to under $30 in paperback.

RAND-Vermont put it this way:

“The simplest, least evadable revenue sources come first. Flat annual license fees are easy to collect: Authorities have to find the enterprise just once and do not have to measure anything. Import duties are easier to collect than excises: « Read the rest of this entry »

Does California Law Limit Localities’ Legalization Options?

September 22, 2016 § Leave a comment

Do municipalities in Washington State and Maryland have more freedom to experiment with marijuana legalization than those in California?

Here’s the context:

A cautious way of legalizing marijuana is to have government stores do the selling. That may sound like socialism, or Democratic Socialism. But it’s the plan that teetotaling Baptist businessman John D. Rockefeller, Jr., urged for alcohol at the end of Prohibition. He put habit-forming intoxication in a separate category of commerce, separate from commerce where the free market works best.  Government stores not only allow more control of commerce, they can allow the government a revenue advantage.

And since March 2015, for marijuana, North Bonneville, Washington, has been using just that method.

Now Oakland, California, home of America’s first marijuana tax, approved by voters by a 4-to-1 majority in 2009, is considering municipal ownership of all new marijuana businesses. « Read the rest of this entry »

Phasing in marijuana taxes — Monterey County

September 12, 2016 § Leave a comment

It sounds like taxing jurisdictions are waking up to the shrewdness of keep marijuana taxes low at first, but not forever, as the industry matures.  Monterey County, California, has been considering a plan to phase marijuana tax rates up:

“Developed with the help of consultant HdL and Associates, the tax would be phased in over a five-year period. For sales, the tax would start at 5 percent of gross receipts per fiscal year effective Jan. 1, and increasing 2.5 percent every fiscal year beginning July 1, 2020, to a maximum rate of 10 percent. For general cultivation, the tax rate would start at $15 per square foot of canopy, or growing area effective Jan. 1, and increase by $5 every fiscal year beginning July 1, 2020, to a maximum rate of $25 per square foot. « Read the rest of this entry »

Tax Foundation overlooks Colorado’s de facto per-gram marijuana tax

August 27, 2016 § Leave a comment

The Tax Foundation says marijuana taxes not based on price are “untenable.”  That’s wrong.  Colorado has been merrily collecting millions on a de facto weight-based tax from Day 1 of legal marijuana sales.

Here’s the full quote: “Because marijuana can be purchased as a cigarette, an edible, a liquid, or a vapor, all with a wide variety of concentrations, a specific excise tax is untenable. Each state thus far has framed its tax as a certain percentage of the retail or wholesale sales price.”

Well, not Alaska – though collections there by weight at $50 an ounce, $1.76 per gram, have yet to start.

But the proof that a “specific” excise (here, one based on weight) is not untenable turns up in Colorado. OK, Colorado “frames” its producer tax as 15 percent of sales, but actually collects tax on every gram by weight. And it has done so from the very get-go of legalization, with collections starting in early 2013. « Read the rest of this entry »

Environmental marijuana tax

August 10, 2016 § Leave a comment

Indoor cultivation of marijuana takes lots of electricity, and mixed-light takes some.

Humboldt County, California, will decide in November on an environmentally friendly cannabis tax. The rates are:

$1 per square foot for outdoor cultivation area,
$2 per square foot of mixed-light cultivation area,
$3 per square foot of indoor cultivation area. « Read the rest of this entry »

Rockefeller, taxes, and alcohol in the early 1930s

August 9, 2016 § Leave a comment

Why did John D. Rockefeller, Jr., look for safe ways to deal with alcohol, and so commission the study, “Toward Liquor Control,” that recommended state monopoly sales?

My view, which I tweeted, is: “Rockefeller liked but couldn’t maintain alcohol Prohibition; faced reality with retreat to state liquor stores.”

My friend Kevin Sabet replied, “Actually, Rockefeller reversed support of alcohol Prohibition because of promise of lower corp tax. Didn’t work out!”

I think he is wrong. Many people did reverse support of alcohol Prohibition because of the promise of lower corporate and individual taxes. I think Kevin confuses Rockefeller with Pierre DuPont, « Read the rest of this entry »

Maximizing marijuana revenue

August 8, 2016 § Leave a comment

To maximize marijuana revenue, a state might do what a Concord (NH) Monitor editorial – and Gubernatorial candidate Steve Marchand – suggest: “Legalize marijuana use and move its sale into state stores.”

New Hampshire’s government-monopoly liquor stores do now what the Monitor suggests for marijuana: “Locate outlets on its borders and structure pricing to maximize sales to nonresidents.” « Read the rest of this entry »