It’s hard to measure THC in bud or flower accurately enough to tax. Take a look at some of the science here.
But you might tax what sellers say is the THC content of their product.
Here are three examples of how government can tax claims, false or true: The old book income AMT, the stated THC tax for cannabis, and the Swaggering Stud tax in Gulliver’s Travels.
Let’s start back in 1727, with the “Swaggering Stud” tax. In Gulliver’s Travels, Gulliver listened to a “professor” who proposed this plan: The “highest Tax was upon Men who are the greatest Favourites of the other Sex, and the Assessments, according to the Number and Nature of the Favours they have received; for which, they are allowed to be their own Vouchers.” Decode the olde English, and you’ve got a tax on either promiscuity or boastful lies about sex.
You don’t care about the truth of how the Number and Nature of Favours received. The tax base is the claimed Favours. So the boastful liar gets taxed just like the truthful Casanova. Understating Favours received equals modesty, which Swift might approve of. So unreported Favours aren’t taxed.
OK, Swift was a satirist. But the approach of taxing claims, rather than something you can count and audit, is worth a look.
There’s precedent. There was once a federal alternative corporate minimum tax on “book” income — the income corporations reported to shareholders. The idea was that corporations couldn’t have it both ways – telling shareholders they were profitable, and telling the federal government they weren’t. So they were taxed on what they told shareholders – despite federal tax breaks and loopholes.
Continue reading “Swift’s Sex Tax and Stated THC”