For a couple of years, I labored (literally) under the impression that proposals to legalize marijuana might need high revenue to pass.[1] I got that impression from the repeal of alcohol Prohibition, where “revenue considerations, when joined to the desire to eradicate the evils that grew out of prohibition, . . . gave the repeal movement its powerful motive force, leading finally, on December 5, 1933, to the abandonment of the dry law.”[2]
Well, in November balloting on marijuana legalization, voters in Washington faced a relatively strong tax scheme; voters in Colorado, a relatively weak one.[3] Both proposals passed with strong majorities; the majority in Washington, 55.44 percent,[4] was only marginally higher than that in Colorado, 54.83 percent.[5] In press coverage, the level of taxation was pretty much a nonissue.
Meanwhile, in Oregon, a legalization proposal with a nonsensical revenue plan (putting a state monopoly in the hands of marijuana producers) got some 44 percent approval.
Issues other than taxes drove those results. So the tax card is no ace in the hole. I was wrong.
More to come . . .
[1] “Laws To Tax Marijuana,” 59 State Tax Notes 251-280 (January 24, 2011), online at http://ssrn.com/abstract=1741735 and https://newtax.files.wordpress.com/2011/01/20-may-2011-taxing-marijuana4.pdf.
[2] Tun Yuan Hu, The Liquor Tax in the United States, 1791-1947: A History of the Internal Revenue Taxes Imposed on Distilled Spirits by the Federal Government 63 (New York: Columbia University, Graduate School of Business 1950).
[3] “Gangs, Ganjapreneurs, or Government: Marijuana Revenue up for Grabs,” 66 State Tax Notes 255-269 (October 22, 2012), online at http://ssrn.com/abstract=2165864 and https://newtax.files.wordpress.com/2012/10/gangs-ganjapreneurs-or-government-marijuana-revenue-up-for-grabs.pdf
The Center for New Revenue 