Whatever vice tax society wants

The cannabis industry, or some of it, wants taxes as low as possible. Consumers, at least some of them, display different interests.

I asked my friend Allen St. Pierre, head of NORML, the lobby for cannabis consumers, about his view of taxation. (Congratulations to new parents Allen and his wife on the birth of their daughter.) Here’s what Allen authorized me to publish:

“Consumers will pay whatever vice tax society wants so long as the taxes are sufficiently low enough so as not to foster an untaxed and unregulated black market in cannabis production and sales.”

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Defeating the black market is discussed at length here, starting on page 13: “II. How much tax can the marijuana market eventually bear?” To summarize, there is reason to think that the black market prices may not drop during legalization (once violation of prohibition is converted to tax evasion). (Reducing the black market to zero is an impossible task. There is an optimal amount of crime, including the crime of tax evasion, and it’s not zero.)

Consumers, at least those taking the thoughtful NORML approach, are not asking for a price cut. If government can’t banish the black market to the margins, though, don’t expect consumers to pay tax.