Tax Base for Marijuana: Price Fails

They are giving the stuff away in Colorado.  Clearer proof of the inadequacy of a percentage of price tax base for marijuana would be hard to find.  If the price (the tax base) is zero, the tax rate doesn’t matter.  Of federal taxes on tobacco or alcohol, only the cigar tax uses (in part) a price base.  But all the marijuana taxes so far do.  We have a long way to go.

Sure, Colorado’s rules are not up and running.  But businesses can bundle this with that, overcharging for one and not for the other.  That’s why weight and potency bases are better.


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