Dear Members of the Vermont Marijuana Commission:
It was a privilege to serve as co-author of the RAND Report, Considering Marijuana Legalization: Insights for Vermont and Other Jurisdictions, http://www.rand.org/pubs/research_reports/RR864.html, and as the only attorney and tax person to do so.
I would be delighted to try to come to speak with you if you would be willing to hear me. In any event, here are the four main points I would make.
1. Taxes can and need to go up over time. Already, economists say, “[D]espite having the nation’s highest tax rate, Washington . . . could generate significantly higher revenue by increasing the tax rate.” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3237729. But taxes may still be too high in California, where sales just started.
2. Price-based (“ad valorem”) taxes are short-sighted. Taxing by weight or stated THC potency minimizes the problem of having to deal with taxes that need to go up over time, and solves problems of unreliable “transfer” or related party prices, and of unneeded tax cuts on standard price discounts for quantity or for employees.
3. If price-based taxes appeal to you for simplicity, canopy taxes, based on square footage of production, used by many California localities, are even simpler.
4. Expenses of marketing and advertising cannabis should remain non-tax deductible. RAND report, Appendix B.
At your service,
I sent that in on this form: https://marijuanacommission.vermont.gov/contact