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.
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.
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
Getting ready for a marijuana tax panel for the National Tax Association in Tampa Friday. Unfortunately, my panel happens at the same time as a panel that overlaps tremendously with our subject matter. Continue reading National Tax Association appearance on Marijuana Taxation
Powerpoint slides from my old friend from DC tax policy Peter Barnes’s class at Duke today: master-sales-and-vat-duke-2019! 2