State Universities to grow marijuana

“Louisiana State University and [HBCU] Southern University want to begin growing marijuana for medical use. The boards of both schools approved plans Friday to pursue licensing, making them the sole growers and researchers for the state, The Associated Press reported.” The source is here.

LSU’s vice president for Agriculture “said university officials believe they can meet security requirements and retain federal funding. He said LSU could become a leader in research on the medicinal properties and cultivation of marijuana.”

Objections to states getting in the marijuana business are looking weaker.  Continue reading “State Universities to grow marijuana”

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Canopy tax in Humboldt

Humboldt County, California, Board of Supervisors unanimously approved a cannabis cultivation canopy excise tax Tuesday. “Outdoor, mixed light, and indoor farms would all be taxed differently. An example is smaller outdoor grows would be taxed $1 per square foot while the large outdoor grows would be taxed $6 per square foot.”  So small growers get a tax break.

The details have not been drafted. The press report, from KRCR, does not say whether outdoor grows would be taxed more than indoor.

In particular, one thing to watch for is whether the tax contains absurd marginal rates, or cliffs, at break points between categories. Continue reading “Canopy tax in Humboldt”

Big = Powerful?

Concentration of economic power makes me nervous, and I’m unpersuaded by the assertion that “”Top researchers just demolished a huge fear about legal pot” in a Brookings study saying, “Worry about bad marijuana—not Big Marijuana.” Big companies selling marijuana will have economies of scale to push prices way down, and political power to oppose tax increases.

Now well organized small businesses, acting in concert, can have plenty of political power, adequate to prevent taxes from going up. Here are a couple of anecdotes, based on my recollections from working for Congress three decades ago, before Citizens United:

The major, multinational oil companies were pretty good at lobbying, but the small, independent producers Continue reading “Big = Powerful?”

Alcohol taxes — Brookings

Having the strong view that alcohol taxes are kept too low in the United States by a combination of industry power and anti-tax sentiment, I was startled to see this ambivalence (at best) from my friend John Hudak and his colleague Jonathan Rauch at Brookings:

“Public health advocates would like to see less advertising reaching minors, and they argue that alcohol taxes are too low to cover social externalities and deter use. The industry argues that taxes are already punitively high.15 Because regulatory practices and taxes differ across states and change over time, generalizing is complicated. On the whole, however, the regulatory regime for alcohol does a credible job of restraining antisocial and irresponsible practices, has proved to be broadly acceptable to the public and the industry, and has also proved to be stable and sustainable. In those important respects, modern regulation of Big Alcohol is a success story.” Continue reading “Alcohol taxes — Brookings”

Transfer pricing at Duke

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Transfer pricing at Duke for private sector and government people, with Professor Peter Barnes.  Half the class in this one-week international tax program was female.  I was delighted to sit in and to speak a little.  I don’t remember much from 20+ years ago, but transfer pricing still leaves a lot of money in tax havens — stateless income.

Program site: http://dcid.sanford.duke.edu/academics/exed/transfer-pricing

Transfer pricing

This week, a Transfer Pricing Exec Ed Program at Duke is being taught by my old friend from government service, Peter Barnes. I’ve been sitting in some, and am to speak tomorrow (against the separate entity and for formulas, as much as possible).

International is the hardest part of tax.
Transfer pricing is the hardest part of international.
Intangibles are the hardest part of transfer pricing.

A lot is new. For the first time in years, I’ve heard people talk about a “real country” – one that’s not a tax haven, or phony country.