Phasing Rates In

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.

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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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