Proposals to tax e-cigarette nicotine juice: NC (low) and WA (high)

NC proposal:  5 cents a milliliter of juice, regardless of nicotine content;  WA: 8 cents a milligram of nicotine.  There are about 1,000 milligrams in a milliliter.

Here is source material:

North Carolina:

Tobacco Industry Proposes Tax on E-cigarettes, By Rose Hoban and Hyun Namkoong

The excise tax supported by a representative of R.J. Reynolds would place a 5 cent tax on the equivalent of a pack of cigarettes.

The scene was enough to make a reporter look twice. Even before the official start of the North Carolina General Assembly session on Wednesday, a representative from R.J. Reynolds Tobacco Company stood before a legislative committee and asked lawmakers to tax his products.

But the tax that tobacco interests were requesting from the Revenue Laws Study Commission was minuscule compared to North Carolina’s usual tobacco tax, which at 45 cents a pack is itself one of the lowest in the nation.

And the move left anti-smoking advocates scrambling Continue reading “Proposals to tax e-cigarette nicotine juice: NC (low) and WA (high)”

Expert: Bud-Trim Line

Question:  

Updating https://newrevenue.org/2014/05/12/can-the-bud-trim-line-hold/:  Let’s say there’s a huge tax on bud and a small tax on trim.  Would that give producers an incentive to cheat – to shift bud, at the margin, just a little, into the trim category and then use it to make concentrates?

Might not a tax-evader deliberately characterize bud as trim to boost the THC content – and thus value – of concentrates?  That evasion depends on the purchaser believing that he is getting a better, more valuable product — edible, vaporizer cartridge, or whatever.  And that belief would need to come from THC labeling (however inaccurate) or some other claim or experience or report. 

Industry expert’s response:

My first impression is, yes it could be more economical to move lesser buds over into the trim pile.  A lot of that depends on the market.  In some markets small buds are desired by the consumer, for less mold and easier utility.  Under that pressure, it might still be beneficial to sell smaller buds as is.  There is also a market for big boutique buds, the ones that look like the ‘bud porn’ you see in trade magazines.  Those larger buds will always go directly to sale as bud. Additionally, if there is some kind of hiccup in production, some plants could produce some seeds and those wouldn’t be viable for sale in the bud market. So there a number of pressures besides taxes that move the line between bud and trim. Continue reading “Expert: Bud-Trim Line”

How Uruguay Will “Tax” Marijuana

From The Pan-American Post:

. . .  commercial growers will be subject to a “variable fee,” which would ultimately be used to vary the price of the drug in pharmacies. . . . [A]dditional taxes may be added later . . .

Ultimately, the lack of built-in tax on marijuana sales — at least initially — is one of the strengths of the law. This provides important flexibility, allowing officials to accurately set the price to keep the drug competitive with the black market without worrying about additional taxes making it prohibitibely expensive for users. It’s also worth noting that this gives the Uruguayan government an advantage over authorities in Washington and Colorado (where the drug’s price will be set by state and local taxes as well as supply and demand).

Can the bud-trim line hold?

Fascinating Update at https://newrevenue.org/2014/05/15/expert-bud-trim-line/ — sophisticated analysis from an industry expert, who knows far more than I.

Context:  Colorado is de facto imposing wholesale per-gram marijuana taxes:  62 cents for potent bud, or flowers, and 10 cents for less valuable trim, or leaves.  New Approach Oregon’s prominent 2014 initiative would tax bud at $1.23 a gram, trim at 35 cents.  Rhode Island Senate Bill 2379 would tax “dried flowers” at $1.76 per gram, and “all other parts” of the plant at 35 cents. Alaska’s predicted-to-pass 2014 initiative would tax at $1.76 per gram, too, but would allow a tax cut for parts of the plant that aren’t so valuable or so potent.

Problem:  “It would be impractical to try to establish legally enforceable standards of how well trimmed a bud can be before it is no longer legally a bud.”  That’s from After Legalization, by Jon Walker.  Phil Smith calls the book “in-depth, thoughtful, and insightful.” http://stopthedrugwar.org/chronicle/2014/apr/29/marijuana_past_and_future,

Update:  Here is a  40-second video of a mechanical separator of bud and trim — but we don’t see the results (url https://www.youtube.com/watch?v=DYDX_8JSygg).  Maybe that kind of thing device be calibrated with a certain size of openings and a certain duration of operation to yield bullet-proof, replicable results.  Maybe.

Revised link: Here is a long video of hand separation of bud and trim.  https://www.youtube.com/watch?v=GOtsu-BKuys. Or search youtube with trim marijuana hand.

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Continue reading “Can the bud-trim line hold?”

Safer

Advocates of marijuana legalization say marijuana is safer than alcohol.  In that case, here’s an SAT-style analogy:  Marijuana: alcohol = monopoly: taxed commerce.   State monopoly would run afoul of federal law in the United States, but in other countries, it seems available.

Here are six reasons a monopoly is safer – more prudent – than taxed commerce:

The game-over first reason to pick marijuana monopoly over a private-enterprise model is that governments get only one chance to set up a monopoly. You can always switch from monopoly to a private model, but not the other way (private businesses would have a powerful and valid complaint).  Having a Plan B is safer than betting all on Plan A.

Second, a public seller can tweak prices more quickly than a Legislature can change tax rates, the better to battle bootleggers in the inevitable price war.

Third, a state monopoly limits the profit motive Continue reading “Safer”

You say deferral, I say deferment

Instead of the word “deferral” for the tax break U.S. companies get to invest offshore, we might use the word “deferment.”  Deferment is what I got from the military draft in the late 1960s, when I let someone else do what the Republic thought needed doing.  Now America needs money to operate the Republic, and our multinationals are happy to dodge responsibility by craftily and artificially shifting taxable income offshore, where tax on it is “deferred” until they bring it home.  The duty is dodged.  Maybe forever, if the multinationals can arrange for themselves another 2004-style Jobs Act Tax Holiday Caper.  When they dodge their duty, someone else has to step up.  That’s deferment.