Salient marijuana taxes

Here’s an update about NYT story on Colorado bundling.


Salient taxes — obvious to the consumer — cut marijuana consumption. Hidden taxes, by contrast, boost revenue. — NPR.

A sales tax added on at the end tends to get ignored by consumers, so it increases revenue.  Fine.  Let the economists say how stupid people are.  I’m sticking with my story.  Being a fan of the administrative efficiency that early collection at a choke point provides, I tend to overlook the biases that different tax structures bring to the consumer’s mind.

Significant retail taxes are crazy.  They allow pilferage and shoplifting (and Oops! Our truck got hijacked).  And bundling — hotel room $200 with open smoking downstairs.  What’s the tax there?


Nimble Prices Make Marijuana Monopoly Better than Private Enterprise

To beat the bootlegger, you need flexible prices.  Legislatures, even at their nimblest, may prove too slow to adjust tax rates adequately.  Uruguay is avoiding that trap:  “If one gram costs $1 in the black market, then we’ll sell the legal product for $1. If they drop the price to 75 cents, then we’ll put it at that level,” says Julio Calzada, a presidential adviser and the head of the National Secretariat on Drugs.

Municipal marijuana monopoly? Delegated?

One way to get revenue from marijuana, maybe the best way, is to have a government monopoly temper the profit motive.  Professor Rob Mikos says state monopolies make no sense, because having the state do the selling of marijuana puts it in direct violation of federal law.  Now a small town in Washington is thinking of doing the selling itself. Continue reading “Municipal marijuana monopoly? Delegated?”

Marijuana Revenue in Rhode Island

From  Pat Oglesby, the Founder of the Center for New Revenue who recently weighed in on the Colorado taxation scenario for the Huffington Post, addressed legalization — and revenue — with GoLocal.

“After legalization, pre-tax prices of legal marijuana are likely to be lower than current black market prices,” Continue reading “Marijuana Revenue in Rhode Island”