A sustainable tax based on weight or volume needs to be indexed for inflation. A new marijuana legalization bill in Oregon, House Bill 3371, fails that test. http://www.leg.state.or.us/13reg/measpdf/hb3300.dir/hb3371.intro.pdf. The tax rate, $35 per ounce, can’t be proved wrong — or right. But the history of alcohol taxation in recent years, where unindexed taxes have lost over half their real value since 1992, proves the value of indexing — if you can about revenue. The answer is not hard to find: the legalization bill in Maryland this year, HB 1453, indexes a $50 per ounce rate.
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