“Setting tax rates in the initiative [was] unwise and inflexible. We should reconsider this approach and allow the LCB [Liquor Control Board], in partnership with the state Department of Revenue, to have the flexibility to adjust tax rates in a more real-time fashion for the first few years in order to prevent under or overpricing the newly available product. Comments at various citizen meetings have loudly complained that the rates are too high and too low to prevent or respond to black markets. We don’t know yet. But we can be assured that without flexibility we are unlikely to adjust rapidly to vital market dynamics.”
That’s from the Chair of the Washington State House Finance Committee, http://reuvencarlyle36.com/. Now it may be hard to start changing the rules in Washington — so soon after the voters enacted them.
And if the Federal Government doesn’t give the green light to WA or CO, states may want to try monopoly. That is, a Federal yellow light, leaving a state system at risk, means that WA and CO didn’t go far enough in limiting leakage.
If the Federal Government goes beyond the yellow light and gives the red light to those states’ laws, shutting the tax system down, monopoly looks even more appealing. But if you prefer taxes to revenue, I don’t know a better plan.
The Center for New Revenue 