Massachusetts Legislative Hearing on a Marijuana Tax

The joint Judiciary Committee of the Commonwealth of Massachusetts let me speak March 2, 2010 at its hearing on S1801, An Act to Tax and Regulate the Cannabis Industry, in the Statehouse in Boston.  Chairman Eugene O’Flaherty and the Committee were respectful to all.

Here’s what I said, more or less:

Mr. Chairman and Members of the Committee,

Thank you for your patience.  My name is Pat Oglesby.  I’m a lawyer and founder of a nonprofit organization, the Center for the Examination of New Taxes, based in North Carolina.  On an airplane next to someone who talks too much, who won’t shut up, mentioning our website, newtaxes.org/,  is a . . . conversation . . . stopper.

Tax marijuana?  Or let criminals get richer?  I’m not arguing legalization, but the power to tax is the power to discourage, and if you are mad at marijuana, you can tax the heck out of it if you start with S 1801 and consider ten tighteners.

S 1801 does many things right:  here are three.

  1. Its tax starts high, with extra tax on potency.   I’m not advocating cheaper marijuana.  John Prine sang about the price:  “You may see me tonight with an illegal smile.  It don’t cost very much, but it lasts a long while.”  If you permit pot puffers to partake in peace, they’ll pay plenty.
  2. It does not exempt medical marijuana from tax.  We can treat marijuana like Penicillin or like Pabst Blue Ribbon, but not like both, without a lot of fussing [about who’s sick and who’s faking].
  3. The bill allows changes in the tax rate so as to fight bootlegging.  The alcohol bootlegger had the dignified image during Prohibition of mighty, respected kingpin.  Now he’s a toothless backwoodsman sneaking around in the dark.  Repeal of marijuana Prohibition can take away the drug lords’ mystique along with their money.

Ten possible tighteners would make the tax more bulletproof.

  1. Index for inflation.
  2. Add an alternative minimum tax based on retail price, as Europe does with tobacco.
  3. Start small with a pilot program in an eager City or Town, with all revenue coming to the
    Commonwealth.
  4. Auction off licenses for producers and distributors.
  5. Don’t worry about protecting hemp.
  6. Charge consumers for a license like a hunting license.  Maybe base the fee on income.
  7. Allow sale of only items that bootleggers can’t copy:  maybe in cigarette paper that’s hard to counterfeit, or with genetic markers like the big seed companies use.
  8. Limit the exemption for home grown.
  9. Delay the effective date until the Federal Government winks, as it has with medical marijuana.
  10. Add a sunset date.

Tax marijuana?  Or let criminals get richer?   Why not tax the heck of it?  Thank you.   God bless the Commonwealth of Massachusetts.

Advertisements

Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s