The Center for New Revenue

My friend University of Denver Law Professor Sam Kamin, who co-chaired the Regulatory and Tax Structure Working Group of the California Blue Ribbon Commission on marijuana legalization with me, is to thank for whatever understanding I have of RICO here. Still, Sam does not necessarily agree with anything I write.

Sam points out that RICO, the Racketeer Influenced and Corrupt Organizations Act, poses a huge threat to private marijuana businesses. A Colorado case just settled out of court, with the defendant marijuana business shutting down, and defendants paying $70,000 to plaintiffs.  Another suit is pending. Continue reading “State marijuana businesses are immune from RICO”

In Colorado, wholesale marijuana prices are not dropping yet. The latest official data shows bud prices nearly flat over time, but trim prices going up. New official “average market rates” (AMR) – wholesale prices – are here:

	AMR Prior to December 31, 2014	AMR as of January 1, 2015	AMR as of July 1, 2015	AMR that will be effective on January 1, 2016
Flower Rate ($/lb)	$1876	$2007	$1868	$1948
Trim Rate ($/lb)	$296	$364	$370	$464
Immature Plant Rate ($/EA)	$9	$9	$8	$9

https://www.colorado.gov/pacific/sites/default/files/AverageMarketRateFactSheet.pdf Continue reading “Colorado wholesale marijuana prices aren’t dropping”

Newsweek blog picks up Brookings article here, or at http://www.newsweek.com/how-forgotten-tax-footnote-limits-marijuana-trade-408190.  Only the title is different, and they add this caption to a photo of a plant:  “Section 280E of the federal tax code, a 1982 brainchild of Bob Dole’s Senate Finance Committee, is hitting state-legal marijuana sellers in the pocketbook.”

And here it is: Continue reading “How a forgotten tax footnote limits the marijuana trade — 280E”

Brookings FixGov blog published what they call a deep dive on 280E on Decmeber 18, 2015.  The Brookings publication is here, but I’ll paste below.  Thanks to John Hudak and Grace Wallack of Brookings for editing it brilliantly, and to Rachel Barry and Emily Oglesby for comments on earlier drafts.  And a hit tip to Bob Dole, a master at legislating.  But maybe 280E was just luck.

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Here is the text of the failed 2015 Ohio marijuana legalization initiative.  My source, http://responsibleohio.com/the-amendment/ no longer links to anything. (http://responsibleohio.com/ now converts to http://freemarketohio.com.)  Skip the long-winded summary by searching for “FULL TEXT OF AMENDMENT.”

Amendment

TITLE

Marijuana Legalization Amendment

SUMMARY

This Amendment would add a new section 12 to Article XV of the Ohio Constitution Continue reading “Responsible Ohio 2015 Marijuana Text”

As a result of a recently completed federal income tax audit, I stopped getting prescriptions from Walgreen’s. All my other health care providers, physicians and pharmacies, when asked, sent me a full list of everything I spent on deductible purchases in 2013. Walgreen’s made me ask in writing twice, and then sent me an incomplete list as if it were complete. They never furnished a full list (leaving me to rely on receipts that included items their list omitted). Continue reading “Dropping Walgreen’s thanks to tax audit”

As reported 16 September, my 2013 federal income tax return was chosen somehow for an audit.  After hours of assembling documents and furnishing them to the IRS, the result came in the mail yesterday:  I get a refund of $219.00. Continue reading “Audit yields refund”

For folks from North Carolina, who think of Elizabeth Dole, who passed through here long enough to get elected as our Senator, as Senator Dole, I think of her husband as the real Senator Dole.

Bob Dole, when Chair of the Senate Finance Committee, was a great American, I thought. He was looking to protect his friends, but he didn’t mind taxing other people. That was the best the public could get back then, and may still be. The alternative is Don’t Tax Anybody, which calls for selling a lot of assets.  Or going broke.

Newt Gingrich once called him the tax collector for the welfare state.  Senator Bob Dole didn’t have the visceral anti-tax attitude that seems prevalent in today’s GOP.  It’s not surprising that in 1982, when the idea of 280E, denying deductions for selling illegal drugs, came up, it came up in Bob Dole’s Finance Committee.

Revenue from marijuana will be small at first, because highly taxed legal commerce can’t beat the black market. RAND’s 2015 Insights for Vermont makes that point clearly. Liquor taxes had to stay low for a while after Prohibition was repealed, as 2011’s “Laws to Tax” pointed out.

Elected officials in Colorado are having to explain that to the public. Here’s an excerpt from an article by Peter Marcus in the Durango Herald, titled “Hickenlooper: Marijuana not a budget savior”:

Gov. John Hickenlooper on Thursday said now is not the time to consider marijuana tax revenue as a new funding source for Colorado. . . . Continue reading “Marijuana revenue requires patience”

Canadians, like North Carolinians, say they prefer the safer alternative for marijuana commerce – government control of retailing. The RAND Report for Vermont explains why government stores are safer, and more cautious. This HuffPo article explains why government stores are not impossible in the United States.

Here are the results of the recent poll in Canada, where several provinces  allow liquor sales only through government outlets.  :

“When asked how legal marijuana should be produced and sold, the largest group opts for a distribution system where large corporate growers only are licensed to grow marijuana and it is sold through government agencies like liquor boards (45%), Continue reading “Gvt stores favored”

Ohio’s Issue 3, which would have created a marijuana cartel and enshrined a primitive tax structure and low tax rates in the State Constitution, is going down to a landslide defeat.  Maybe the legalization community will offer the public a better deal.

About my two pieces for Huffington Post on the Ohio Marijuana Legalization Initiative, Issue 3:  As of 7 a.m. EST today, one has 8,900 likes on Facebook; the other has 18. That’s nearly 500 times more.

The popular one comes out firmly against Issue 3. The other one quotes the Bible (Jacob and Esau), and is more nuanced:

[I]is marijuana prohibition a bigger problem for America today than corrupt government — government where moneyed interests call the shots and seize the spoils? That’s for every voter to decide. Continue reading “What Readers Like”

I would probably stop opposing Ohio Issue 3 if it had this kind of provision, from today’s new California initiative:

“Except as otherwise provided [in rules that make amendment easier], the provisions of the Act may be amended by a two-thirds vote of the Legislature to further the purposes and intent of the Act.” Continue reading “CA better than OH 3”

Ohio’s “Issue 3” plan to legalize marijuana is the worst serious plan I’ve seen. It creates a permanent cartel, and puts  Constitutional cap on low, primitive taxes — forever.  I oppose it as hard as I can.  Freezing primitive price-based taxes is a deal killer from my tax policy perspective

But it could be worse.

— The wealthy folks who corner the market don’t appear nefarious. At least with Issue 3 voters aren’t faced with a deal where the money goes to, say, the KKK. (Some consumers say nothing matters but the consumer, and they don’t care where the money goes. What if, instead of to garden variety rich people, the money went to ISIS? Continue reading “Faint praise for Ohio 3”

My friends Russ Belville and Dan Riffle discuss the details of Ohio’s Issue 3, a cannabis legalization measure, thoughtfully and civilly. They start at the 28:15 mark here (URL http://thisweekindrugs.org/responsible-ohio-15/), and go to about the 1:06:00 mark.

Here are some notes, taken while listening. (I appreciate Russ having me on his show, but I agree more with Dan here.)

Dan says Issue 3 is “anti-democratic” and “anti-capitalistic.” Continue reading “Russ Belville and Dan Riffle on Ohio Issue 3”

Ohio’s Marijuana Referendum: Watch the Money

With 1,300 “likes” at  http://www.huffingtonpost.com/pat-oglesby/ohios-marijuana-referendu_b_8392610.html Posted: 10/27/2015 5:30 pm EDT

When Russell Long came to the U.S. Senate and joined the Finance Committee, legend has it, he voted against every motion, no matter how noncontroversial. Eventually, a more senior senator asked him why. Long reportedly answered: “I’m not for any deal unless I’m part of it.”

Ohio voters might bear that saying in mind when they vote on the Issue 3 marijuana legalization plan on November 3.

Issue 3 exemplifies “regulatory capture” — when an industry writes the rules for itself. Regulations are supposed to protect the public from industry. With regulatory capture, regulations protect an industry from the public. Continue reading “Saying No to Ohio Measure 3”