Two recent marijuana tax bills phase in tax rates – starting small and letting rates rise.
H.R. 1014 by Congressman Blumenauer would impose a federal tax starting at 10 percent and rising to 25 percent. A bill in Massachusetts by Representative Rogers and 11 others would tax bud starting at $10 and ounce and rising to $50:
(i) during the first year following the effective date of this act, the sum of $10 per ounce;
(ii) during the second year following the effective date of this act, the sum of $20 per ounce;
(iii) during the third year following the effective date of this act, the sum of $35 per ounce; and
(iv) during the fourth and following years following the effective date of this act, the sum of $50 per ounce.
A similar increasing rate applies to concentrates.
That’s one of five ways listed in the RAND Report for marijuana tax laws to react to the pre-tax price collapse that’s coming. See pages 88-93.
Folks studying marijuana legalization are thinking that letting all growers grow all they want might lead to overproduction. So growers might get quotas. But who would decide what quotas growers get, and how? “On the merits,” on the basis of perceived strength of application? (Watch out for cronyism.) Lottery? History of production? That’s the method used in the 1930s for tobacco.
Folks interested in this problem might read: Prosperity Road : the New Deal, tobacco, and North Carolina / by Anthony J. Badger, Chapel Hill : University of North Carolina Press, 1980. Continue reading Grower Quotas
Here is the audio of my telephone testimony 16 February to the Oregon Joint Legislative Committee on Measure 91: http://oregon.granicus.com/MediaPlayer.php?clip_id=8165 — 1:20:40 is where I start, and I finish by 1:38:00. At about 1:36:51, Co-Chair Lininger says, “That was really a delightful phone call.” I appreciated the chance to testify before this Committee, which is trying to figure these issues out.
Here is my statement for the Oregon State Legislature’s Joint Committee On Implementing Measure 91 tonight: Oglesby Testimony Oregon 16 Feb 2015
In light of the suggestion in the RAND Report for Vermont of increasing tax rates on legal marijuana, it’s heartening to see Congressman Earl Blumenauer’s gasoline tax bill — https://www.congress.gov/bill/114th-congress/house-bill/680/text — taxing by the gallon, with year-by-year rate increases. The Reports suggests taxing marijuana by weight or potency — which is like volume (gallons) for gasoline. Here are Mr. Blumenauer’s rates for gasoline other than aviation gasoline–
“(I) for tax imposed before 2016, 18.3 cents per gallon,
“(II) for tax imposed during 2016, 26.3 cents per gallon,
“(III) for tax imposed during 2017, 30.3 cents per gallon, and
“(IV) for tax imposed after 2017 and before 2028, 33.3 cents per gallon,”.
And there is indexing for inflation: Continue reading Climbing indexed gas tax
Washington State collects a 25 percent tax from processors/producers and another 25 percent tax from retailers.
So far, the retail tax brings in some 64 percent of the total from all those taxes; the ratio of the retail tax to the other taxes is 1.57 to 1. Continue reading Washington State marijuana tax collections