Category: Uncategorized

Marijuana tax indexed: Maryland bill gets it

Delegate Curt Anderson’s Maryland House Bill 1453 to legalize marijuana imposes a $50 per ounce tax on sales to retailers, and then goes on to include as tax: “An amount that the comptroller may set that adjusts the initial $50 per ounce rate for inflation or deflation based on the consumer price index.”  http://mgaleg.maryland.gov/2013RS/bills/hb/hb1453F.pdf

Indexing is essential Continue reading “Marijuana tax indexed: Maryland bill gets it”

North Carolina sales and services tax — a reaction

Here is a comment emailed from a North Carolina tax lawyer:

One analysis puts the [required sales tax] rate between 10-11%.  The more seepage they have in the base, the higher the rate would have to go. Services are easier to obtain for cash (house cleaning, yard work, house painting, etc.) and some can be more easily acquired in cross border activities or electronically where compliance is sketchy. Continue reading “North Carolina sales and services tax — a reaction”

NC sales and services tax proposal runs into more trouble

“[A] swap from income to sales taxation . . . in North Carolina . . . would require sales tax revenue to increase from 1.8 percent to 4.9 percent of state personal income. With the same sales tax base, North Carolina would have to raise its sales tax rate from 5.75 percent to 15.9 percent. With base broadening that would increase the implicit sales tax base to 50 percent of personal income, the rate would have to rise to 12 percent.” Martin A. Sullivan, http://taxprof.typepad.com/files/138tn0789.pdf.

I can’t vouch for those numbers, but I have no reason to doubt them.  It remains hard to imagine the Legislature will adopt such a radical proposal.

Federal Marijuana Tax Bill from Congressman Blumenauer — Is the tax burden just right?

Any marijuana tax needs to be low enough to drive trade into legal channels.  That may happen under a bill from Oregon Congressman Earl Blumenauer, which would “create a federal marijuana excise tax of 50 percent on the ‘first sale’ of marijuana – typically, from a grower to a processor or retailer.” Continue reading “Federal Marijuana Tax Bill from Congressman Blumenauer — Is the tax burden just right?”

Grey market for marijuana — medical suppliers may be a problem

Let me put a nuance on the story http://www.nwnewsnetwork.org/post/grey-market-concerns-grow-washington-legalizes-pot.  Here’s the quote:  “Oglesby doesn’t worry too much about unscrupulous medical marijuana providers entering the true black market – and selling pot to recreational users without a medical card. Why? Because of something he calls, ‘The prohibition premium. You gotta charge more if you are engaged in illegal activity to compensate you for the risk of getting caught and going to jail.'”

Well, the prohibition premium does raise costs for illegal actors, but medical marijuana providers selling to recreational users might have an easy time getting away with violation — it all depends on enforcement.  That’s something to worry about when trying to maintain a tax base.  The illegal market will always be trying to find the path of least resistance.

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NC Sales and Services Taxation: Into the Capillaries

Now the Republicans in North Carolina are backing away from radical sales tax base-broadening that would tax all goods and nearly all services.   But they want some change.

Soon it will be time for them to list which services get taxed for the first time.  So service businesses from tattoo parlors to CPAs will have incentives to (1) hire lobbyists and (2) make campaign contributions to incumbents.

Economics of Bootlegging in the 1950s — Junior Johnson

“A gallon of whiskey [bore] … $11 tax.  You could make it for 75 cents to a dollar and sell it for $3 or $4. . . .  It’s the same way today if you beat the government out of taxes.  It’s what everyone was trying to do back then.”  Junior Johnson, quoted in Peter Golenbock, American Zoom (MacMillan, New York, 1993), page 22.

The federal liquor tax from 1951 to 1985 was $10.50 per proof gallon.  It’s $13.50 today, but with inflation, the tax burden is much less now.

Whisky Rebellion of the 1790s — Petition and Remonstrance

Tax protesting is nothing new, as seen here:  Petition-and-remonstrance.  To complain about the whisky excise tax in the early 1790s, an anonymous North Carolina planter wrote hundreds of lines in verse.  Here’s a sample transcription from Scottish dialect:

Some chaps whom freedom’s spirit warms

Are threatening to take up arms,

And headstrong in rebellion rise

‘Fore they’ll submit to that excise. Continue reading “Whisky Rebellion of the 1790s — Petition and Remonstrance”

Colorado’s Marijuana Regulations — Comments Submitted: Tiny Packages

Dear Members of the Amendment 64 Implementation Task Force:

My best wishes to all of you as you undertake a task no one has tried before.

“Tiny packages”:  that summarizes this submission.  As you work on marijuana rules, you may want to consider a maximum package size less than the one ounce adults may possess legally.  (Maybe this suggestion suits the circumstances, maybe not.  Continue reading “Colorado’s Marijuana Regulations — Comments Submitted: Tiny Packages”

NYT calls for VAT. Is that new?

The VAT has two kinds of complexity:  who is exempt, and what?  Microbusinesses (who?), and medicine (what?), for instance?  Lots of countries have handled these issues, with less furor than with the income tax. (Rates are just a variation on exemption — “what” should bear a low rate instead of no tax?)

The New York Times is up for it:  “Mr. Obama would be wise Continue reading “NYT calls for VAT. Is that new?”