Pushback on 280E

A friend who is a tax policy expert writes, after I sent him my 280E article, https://www.brookings.edu/blog/fixgov/2015/12/18/how-bob-dole-got-america-addicted-to-marijuana-taxes/:

“Thanks for your article;  it’s really interesting and thought-provoking.  You make a better case for 280E than I would have thought possible, although there are still tough questions about why treat marijuana advertising more harshly than tobacco and alcohol advertising (a point you mention), and about the pros and cons of nondeductibility versus direct regulation of advertising (as with cigarette television advertising).”

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Here’s my response:

Yes, as to treating temptation goods similarly.  I might have put that at the beginning, rather than at the end.That’s the message some of my public health friends tell me.

Here’s what’s happening elsewhere: http://www.latimes.com/world/mexico-americas/la-fg-uruguay-marijuana-20161109-story.html:

“In contrast with the United States, Uruguay aims to avoid the creation of lucrative marijuana businesses. Profits are tightly controlled, there are no brands and advertising is banned. It’s an approach Sabini would like to see extended to other intoxicating substances. He hopes that by proving careful regulation can prevent increased usage, decriminalization can be extended to cocaine. He also would like to ban all advertising on alcohol.”

It’s the free speech clause (expanded to commericial free speech) that ties our hands in the United States.  I’m not sure how advertising of tobacco on TV is not protected (some special FCC status?), but much tobacco advertising is restricted only by the Master Settlement Agreement – by contract.

So legislators can’t always ban ads – but they can slow them down with 280E.  (If someone can enforce it).

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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