Ad valorem taxes are flimsy — not just for marijuana

Primitive marijuana taxes start out “ad valorem,” that is, as a percentage of price. Many of my friends who are non-tax drug policy people gravitate toward these price-based taxes, because prices tend to increase with potency, and roughly with intoxication.  I agree:  Price-based taxes are a good first step in what the RAND report for Vermont calls the “tax-base march of progress.”

But price-based taxes are easy to manipulate. For instance, North Carolina’s new 7.5 percent sales tax on tickets (“admission charges”) is getting eroded by an affiliate of the state, the UNC-Chapel Hill repertory theater. For tickets, or medical devices, there is no analog to the useful weight base for marijuana taxes. But a ticket tax illustrates the flimsiness of taxes based on price, as explained below. Continue reading “Ad valorem taxes are flimsy — not just for marijuana”

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UNC erodes NC sales tax

Price-based taxes are easy to manipulate. For instance, North Carolina’s new 7.5 percent sales tax on tickets (“admission charges”) is getting eroded by an affiliate of the state, the UNC-Chapel Hill repertory theater.

When you order tickets, the theater separately states a ‘Web Handling Fee” that is not taxed. Here’s what an order looks like:

prc Continue reading “UNC erodes NC sales tax”

Humboldt OKs 7-acre grow

When I went to Humboldt County in 2015 to find facts for the California Blue Ribbon Commission, I heard informally that a marijuana grow of 10,000 square feet was enough to make a decent living. So that figure was bandied about as a hard cap – as a way to share the wealth that was about to open up. https://newrevenue.org/2015/08/23/sharing-the-wealth-from-legalization/. Being friends with a lot of Democratic Socialists, I’ve been interested in sharing the wealth, and thinking smaller farms would be an experiment in that direction.

Ten thousand square feet, about a quarter of an acre, was the smallest area I heard, but one acre is the hard cap in Proposition 64, the recreational legalization initiative to be voted on in November, (That acre limit sunsets after a handful of years.)  [UPDATE:  A friend in California indicates that the initiative allows one person to own several grow licenses.  So the only remaining hope for spreading wealth is that regulations will cut back on the ability to have multiple licenses.]

Here’s what the Blue Ribbon Commission said about capping production: Continue reading “Humboldt OKs 7-acre grow”

St. Pierre steps down

We came from different directions. Allen St. Pierre, who is stepping down as head of NORML, the cannabis consumer lobby, wanted to legalize marijuana for consumers; I wanted to raise revenue from something whose externalities were less positive than, say, wages paid to workers, which we tax so widely now — while we say America’s most important issue is jobs.

Allen figured that when marijuana got legalized, the public would get a cut. I figured the public would get nothing from cannabis unless the government tolerated it. Continue reading “St. Pierre steps down”