Staging Marijuana Taxes

Here’s how to start low and go slow: Not just phase-ins of rates, but staged effective dates for each new excise tax or tax base, one by one—that’s the insight from the Hoover Institution’s Alvin Rabushka’s enormous Taxation in Colonial America, now discounted to under $30 in paperback.

RAND-Vermont put it this way:

“The simplest, least evadable revenue sources come first. Flat annual license fees are easy to collect: Authorities have to find the enterprise just once and do not have to measure anything. Import duties are easier to collect than excises: Continue reading “Staging Marijuana Taxes”

Does California Law Limit Localities’ Legalization Options?

Do municipalities in Washington State and Maryland have more freedom to experiment with marijuana legalization than those in California?

Here’s the context:

A cautious way of legalizing marijuana is to have government stores do the selling. That may sound like socialism, or Democratic Socialism. But it’s the plan that teetotaling Baptist businessman John D. Rockefeller, Jr., urged for alcohol at the end of Prohibition. He put habit-forming intoxication in a separate category of commerce, separate from commerce where the free market works best.  Government stores not only allow more control of commerce, they can allow the government a revenue advantage.

And since March 2015, for marijuana, North Bonneville, Washington, has been using just that method.

Now Oakland, California, home of America’s first marijuana tax, approved by voters by a 4-to-1 majority in 2009, is considering municipal ownership of all new marijuana businesses. Continue reading “Does California Law Limit Localities’ Legalization Options?”

Phasing in marijuana taxes — Monterey County

It sounds like taxing jurisdictions are waking up to the shrewdness of keep marijuana taxes low at first, but not forever, as the industry matures.  Monterey County, California, has been considering a plan to phase marijuana tax rates up:

“Developed with the help of consultant HdL and Associates, the tax would be phased in over a five-year period. For sales, the tax would start at 5 percent of gross receipts per fiscal year effective Jan. 1, and increasing 2.5 percent every fiscal year beginning July 1, 2020, to a maximum rate of 10 percent. For general cultivation, the tax rate would start at $15 per square foot of canopy, or growing area effective Jan. 1, and increase by $5 every fiscal year beginning July 1, 2020, to a maximum rate of $25 per square foot. Continue reading “Phasing in marijuana taxes — Monterey County”