Month: November 2019

Taxing weed and wealth

At the National Tax Association conference in Tampa earlier this month, my panel on marijuana tax policy was a sideshow.  The hot and trendy topic was taxation of wealth.

It has always been better to tax wealth than to tax income.  As the old adage says:  Money is like manure.  When it’s piled up, it stinks; when it’s spread around, it makes things grow.  Discouraging income is kind of weird.  But we can observe income much more readily than we can observe wealth.  Income moves, so it should be visible; wealth stands still, so it can be invisible.  This is the distinction between flow and stock.  An income tax is a weak proxy for a wealth tax, but it may be the best we can do, so that’s what we’ve got.

So an income tax is like a tax on weed by weight.  Taxing marijuana flower or any raw plant material by THC appeals to drug policy purists, but it’s not practical, for reasons easily findable on this website.  Taxing raw plant material is much easier to do.  Like the income tax, it’s not theoretically great, but it kind of works.  A more perfect tax may not.

 

 

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Income tax purity and 280E

The anti-ad feature of 280E will be a hard sell at a marijuana tax panel for the National Tax Association in Tampa today.  The audience is mostly economists.  Many economists start with the notion that all income should be taxed alike – capital gains and ordinary income, for instance.  And many think deductions should not discriminate, either, so corporate integration fans don’t like favoring interest over dividends.  So singling out marijuana ads (I’d add ads for tobacco and alcohol) will find principled objections.  But we’re not going to tax marijuana like milk.  Excise taxes are OK, but since Free Speech means we can’t ban ads, taxation is a middle ground.

Veterinary marijuana

The hardest issue around marijuana taxation is medical.  I stipulated in my first article, in 2011, that cannabis has medical uses.  But how to decide who is using medically?  I’m speaking Friday at a conference of mostly economists, the National Tax Association, in Tampa.  I don’t expect much help in answering the medical vs. recreational question.

Here’s a story, from California activist Brett Stone, about veterinary use for his dog Walley: Continue reading “Veterinary marijuana”

Movie Review: “The Laundromat”

If there is a better “comedy-drama” film about tax havens, I’d like to see it.  The Laundromat goes into the folks behind the Panama Papers scandal, and ends with a message from Meryl Streep, as herself:

“Tax evasion cannot possibly be fixed while elected officials are pleading for money from the very elites who have the strongest incentives to avoid taxes.”

It’s just out, and maybe it’s not for everybody.  A friend said she didn’t follow it very well.  But for anyone who has been in international tax, at least on the government side, it should be fun.

From Wikipedia:

The Laundromat is a 2019 American biographical comedy-drama film directed by Steven Soderbergh, with a screenplay by Scott Z. Burns. It stars Meryl Streep, Gary Oldman, Antonio Banderas, Jeffrey Wright, David Schwimmer,  Matthias Schoenaerts, James Cromwell, and Sharon Stone.

Weeks after its limited theatrical release, but just two days before its scheduled wide streaming release, the two men at the center of the film, Jürgen Mossack and Ramón Fonseca sued Netflix on October 16, 2019, attempting to block the film’s release. They argued that the film defamed them. Netflix responded the next day, calling the suit “laughable” and saying the film was “constitutionally protected speech.”

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This comes 38 years after the “Gordon Report” on tax havens by my old boss Richard A. Gordon, http://www.archive.org/stream/taxhavenstheirus01gord/taxhavenstheirus01gord_djvu.txt