Why I started studying marijuana tax policy in 2009

In 2009, I was a 62-year old lawyer looking for a pro bono project.  My career in law at its high point was designing tax laws for Congress — writing laws to bring in revenue — as a staffer for the Joint Committee on Taxation and then the U.S. Senate Finance Committee.

I started with marijuana taxation back then for several reasons. 

1 . I didn’t think people should get arrested for possession. Taxation is the main reason and sometimes the only reason that some voters and representatives want to move beyond prohibition.

2.   I’m a tax and spend Democrat.  That last reason makes industry people and even activists nervous, but OK.

3. It was fun to think about. The field was wide open. No tax professionals were studying it — industry didn’t really exist to study it, and tax academics turn up their noses at marijuana taxation because they think both excise taxes and subnational taxes are not important. The top people in drug policy were interested, but they had only a nodding acquaintance with tax policy.

4. I figured that possession would get legal, and that commerce was sure to follow, and so was taxation.  Marijuana tax policy would get interesting.

By the spring of 2010, I went to Massachusetts at the invitation of NORML board member Dick Evans to speak to a legislative committee about taxing marijuana.  In January 2011, State Tax Notes published 25,000 words – “Laws to Tax Marijuana.”  https://newrevenue.org/wp-content/uploads/2014/08/laws-to-tax-marijuana-published-version-in-state-tax-notes.pdf.  

It has lots of discussion about the tax base but very little about the tax burden, except for this kind of thing:  “Tax rates on marijuana need to be low at first to gain advantage in the inevitable price war against bootleggers.  As taxing authorities win that war, they can raise rates and generate more revenue.”

Oh, and in 2009, Obama had said, “Yes we can,” and I figured marijuana taxation could be my little part.