The Center for New Revenue

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”

Here: Barnes Sales and VAT 26 October
are slides from my guest appearance discussing Marijuana and Other Excise Taxes at my old friend Peter Barnes’s Value Added and Sales Tax at Duke Law School today, https://law.duke.edu/curriculum/courseinfo/course/?id=320. It’s a joint course with Duke’s Public Policy School course: http://dcid.sanford.duke.edu/courses/rotary-cornerstone-workshop-1.  Great fun.  Nothing against my fellow U.S. Americans, but it was especially interesting to talk with foreign tax officials learning tax policy at Duke.  (They are not onto cannabis yet, and are working on the never-ending issues of tobacco and alcohol.)

From a tax perspective, Ohio’s November marijuana Initiative may be the worst plan ever to reach the ballot. It caps tax rates forever, by Constitutional amendment.   (Another objection is that it channels all the new wealth directly to its millionaire funders.)

But the Ohio proposal contains a restriction on home growing that I don’t remember seeing in such a prominent proposal. Home growing is a threat to the millionaires who would seize all commercial growing rights for themselves. So the proposal makes home growers get licenses.  But the silver lining for tax enforcement is that licenses will make it harder for home growers to break the rules and start selling in commerce, in competition with the legal, taxed market.  If you want a tight tax system, licensing home growers would be part of the plan.   Continue reading “No home growing w/o license”

Tax breaks for special interests are nothing new.

Taxation in Colonial America, by Alvin Rabushka, mentions the Virginia liquor duty of 1691, which provided full duty for most liquor, a 50-percent reduction for liquor brought in on “ships owned in Virginia in which the importer had an interest,” and complete exemption for liquor brought in on ships made in Virgina.  Continue reading “1691 liquor tax break”

Thanks to Ohio State Law Professor Doug Berman, who said this was a “lovely and astute new Huffington Post commentary.”

Marijuana, Ohio, and Esau  By Pat Oglesby

“Politics is always the lesser of two evils,” Federal Fifth Circuit Judge John Minor Wisdom told me when I was one of his law clerks. I didn’t quite understand that then, in the late 1970s, but I get it now.

Marijuana legalization is gaining steam, and the question is becoming not “whether to legalize” but “how.” And it’s about the money. A recent RAND report put it this way: “A state that legalizes marijuana by allowing limited private sales creates a privilege to sell it. That privilege is worth money, maybe lots of money.”

So the money is up for grabs. And a small group plans to grab all the money in Ohio. The “Responsible Ohio” ballot initiative, to be voted on in November, lets medical and adult-use marijuana be grown and processed only in “ten designated sites,” all owned by wealthy funders of the initiative. Continue reading “Ohio and Esau”

Billionaire Carl Icahn is “currently preparing to form a Super PAC with an initial commitment of $150 million from [him] personally.”  His plan is here.  While allegedly providing a loophole-closer, stopping inversions, he quickly gets to his anti-tax plan: Tax foreign income of U.S. multinationals lightly, if at all.

One problem is that the multinationals have no problem sticking the “foreign” label on income that should be taxed here right away in full.

$150 million: with 435 House Members, and 100 Senators, that’s $280,000 each.   That’s a lot of money for candidates to ignore, and a lot to spend for a tax cut, but Money Talks.  Yikes.

http://carlicahn.com/needed-legislation-letter/

If marijuana is legal, should everyone be able to grow and sell all they want?  Free market absolutists would say yes, but there are two reasons to be cautious.  First, to protect the public:  Some people’s criminal records might make you worry they would sell to minors, or sell untaxed product.  Second, to protect the industry:  You might want to limit how much can be grown for sale; and if so, you might start by limiting who can grow commercially.

Unlimited commercial growing could flood the market and drive prices way down.  Ultra-cheap marijuana could alarm the federal government, leading to a crackdown.  It might increase the number of dependent users as well as use by minors, risking a political backlash among parents.  Although a price collapse might make consumers smile, it could wipe out small producers and leave the industry in the hands of a few big firms.

So if you want to limit growers, how might you do that?  Continue reading “Picking Winners to Grow Marijuana”

Once marijuana is legal generally, medical users no longer need to prove anything to obtain it. But should they pay tax? This post,[1] written for Vermont in early 2015, looks at a conundrum: Medicine is usually tax-exempt, and marijuana is medicine for some people, but it is a recreational intoxicant for others. Some recreational users fake conditions like chronic pain or insomnia to disguise themselves as patients. That phenomenon threatens a tax on marijuana — if medical marijuana gets a tax break.  (A version of this post with footnotes on the same page as text is Part I.A. of this document.)

Continue reading “Taxation of Medical Cannabis after Legalization”

A friend says that private industries “may be able to build in regulatory capture from the first day of legalized marijuana” in some states, and asks if the alcohol industry had any “influence on how the newly legal alcohol industry would be regulated after Prohibition was repealed.”

My impression is that regulatory capture didn’t happen so quickly after repeal of alcohol Prohibition.  Continue reading “Regulatory Capture — 1933 vs. 2015 — Updated 18 October 2015”

“In the 1790s federal excise tax was collected from distilleries based upon the capacity of the still and the number of months it distilled.  In 1798, [George] Washington paid a tax of $332 on stills [with a capacity] totaling 616 gallons operating for 12 months.”

That’s from DISCUS, the liquor lobby.  It brings to mind a cannabis canopy tax — based on number of crops per year.