Expert calls for flexible marijuana taxes

Freezing marijuana tax rates until 2022, as the proposed  “Control, Regulate, and Tax Marijuana Act” in California would do, strikes me as a risky gamble.  Flexibility on taxes is needed.  One expert puts it this way:

“There is stuff we’re going to get wrong – whether it’s tax rates, enforcement, the relationship [between recreational and] medical marijuana,” says law professor Sam Kamin at the University of Denver, who served on a task force that recommended regulations for Colorado’s marijuana industry. “The hope is that we have a system that is easy enough to change … and that people will have some patience and realize we’re the first jurisdiction in the world trying to do this.”

That impatient California proposal has a 25-percent tax rate (lower than the combined federal and state taxes on cigarettes).  That tax has lots of technical problems, but what drives me away is a provision that the Legislature can’t raise the rate and, until 2022, can impose no new taxes (here’s some trivia:  When you read lips, as George H.W. Bush suggested in 1988, “No new taxes” looks exactly like “No nude asses.”  You can see this in a mirror.).  When economies of scale kick in, that percentage-based tax will shrink to nearly nothing, and the only fix, under California law, is another Initiative.  Oops.

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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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