Marijuana taxes: Avoiding the bottom

Localities in Colorado are starting to think about imposing (on top of state taxes) marijuana taxes of their own.

That reminds me of this story:

Steve and Mark are camping when a bear suddenly comes out and growls.  Steve starts putting on his tennis shoes.
  Mark says, “What are you doing? You can’t outrun a bear!”  
Steve says, “I don’t have to outrun the bear—I just have to outrun you!”

My hunch is that the Federal Government will not take a liking to low after-tax marijuana prices – because of leakage to kids and to other states.  So any company with low prices (likely to be in a jurisdiction with low taxes) might be first in line for Federal crackdown.  Keeping prices a little higher than in the lowest-tax town might be enough to direct Federal action elsewhere, at least for a while.  We’ll see.

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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.

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