Tax Foundation overlooks Colorado’s de facto per-gram marijuana tax

The Tax Foundation says marijuana taxes not based on price are “untenable.”  That’s wrong.  Colorado has been merrily collecting millions on a de facto weight-based tax from Day 1 of legal marijuana sales.

Here’s the full quote: “Because marijuana can be purchased as a cigarette, an edible, a liquid, or a vapor, all with a wide variety of concentrations, a specific excise tax is untenable. Each state thus far has framed its tax as a certain percentage of the retail or wholesale sales price.”

Well, not Alaska – though collections there by weight at $50 an ounce, $1.76 per gram, have yet to start.  [UPDATE, 1 December 2016:  Collections have started.  http://highfinancereport.com/alaska-receives-first-tax-payments-from-marijuana-businesses/.  And the rate is still $50 per ounce, http://www.tax.alaska.gov/programs/programs/index.aspx?60000.  That’s despite a Tax Foundation indication that that tax “May change before implementation in late 2016.”  http://taxfoundation.org/article/marijuana-legalization-and-taxes-lessons-other-states-colorado-and-washington.]

But the proof that a “specific” excise (here, one based on weight) is not untenable turns up in Colorado. OK, Colorado “frames” its producer tax as 15 percent of sales, but actually collects tax on every gram by weight. And it has done so from the very get-go of legalization, with collections starting in early 2013. Continue reading “Tax Foundation overlooks Colorado’s de facto per-gram marijuana tax”

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Environmental marijuana tax

Indoor cultivation of marijuana takes lots of electricity, and mixed-light takes some.

Humboldt County, California, will decide in November on an environmentally friendly cannabis tax. The rates are:

$1 per square foot for outdoor cultivation area,
$2 per square foot of mixed-light cultivation area,
$3 per square foot of indoor cultivation area. Continue reading “Environmental marijuana tax”

Rockefeller, taxes, and alcohol in the early 1930s

Why did John D. Rockefeller, Jr., look for safe ways to deal with alcohol, and so commission the study, “Toward Liquor Control,” that recommended state monopoly sales?

My view, which I tweeted, is: “Rockefeller liked but couldn’t maintain alcohol Prohibition; faced reality with retreat to state liquor stores.”

My friend Kevin Sabet replied, “Actually, Rockefeller reversed support of alcohol Prohibition because of promise of lower corp tax. Didn’t work out!”

I think he is wrong. Many people did reverse support of alcohol Prohibition because of the promise of lower corporate and individual taxes. I think Kevin confuses Rockefeller with Pierre DuPont, Continue reading “Rockefeller, taxes, and alcohol in the early 1930s”

Maximizing marijuana revenue

To maximize marijuana revenue, a state might do what a Concord (NH) Monitor editorial – and Gubernatorial candidate Steve Marchand – suggest: “Legalize marijuana use and move its sale into state stores.”

New Hampshire’s government-monopoly liquor stores do now what the Monitor suggests for marijuana: “Locate outlets on its borders and structure pricing to maximize sales to nonresidents.” Continue reading “Maximizing marijuana revenue”

Marijuana revenue estimate

How much revenue might governments get from legal marijuana commerce?

In early 2013, I took a stab and said 80 percent of at $30 billion market, or $24 billion.

Now I don’t think we can tax marijuana at the 80 percent level Europe uses for cigarettes. But the market should be bigger than $30 billion.  So I’m rethinking, and working on a more thoughtful estimate of what the market can bear, Continue reading “Marijuana revenue estimate”