Thirty-plus percent does sound a bit excessive:
If a Colorado ballot initiative passes, marijuana buyers will have to pay a 15 percent excise tax, as well as up to an addition 15 percent sales tax. Similarly, a Denver city ballot issue would tack on a 3.5 percent tax on marijuana and give the city government the ability to raise that up to 15 percent, all on top of the state tax initiatives.
On Monday, Denver residents enjoyed a free joint giveaway, part of a protest against the proposed taxes.
And weed growers do deserve the same deductions as everyone else:
Anti-tax crusader Grover Norquist threw his weight Thursday behind a congressional effort to allow legal marijuana business to get federal tax breaks. […]
At issue is a section of the federal tax code that prohibits business considered drug traffickers from taking basic tax deductions from business expenses. It was added to the tax code back in the 1980s to target large-scale drug cartels, but hasn’t been changed even though 20-plus states have legalized marijuana in some form.
Reading these pieces, I’m thinking that weed has taken a big step in legitimacy when people are arguing about the details of taxation, and even the conservative Grover Nordquist wants to give you the same tax break that is the God-given right of every real American.
raven
I said goddamn . . .
Ben Cisco
He just wants to starve the beast. Any port in a storm will do.
raven
Just in case someone doesn’t get it.
Steppenwolf
raven
@Ben Cisco: Hey, I had a question back on that great chevy pic you posted,
jibeaux
Well, to my thinking, the ability to levy a significant tax on pot is a strong argument in favor of legalization. I think decriminalization is good public policy, but I don’t really have a dog in the fight unless you’re going to offer me an income stream for schools that I don’t have to battle to the death for. That makes me feel a lot more proactive about it.
mistermix
@jibeaux: I agree – 30% (or 45%?) seems a bit high, but it should be a nice big number.
jibeaux
For point of reference, in my state liquor has a 30% excise tax, with another 7% state sales tax and any local taxes on top of that.
jibeaux
For point of reference, in my state liquor has a 30% excise tax, with another 7% state sales tax and any local taxes on top of that.
cvstoner
So, not only does Norquist want to drown our government in a bathtub, he wants to smoke a tax-free blunt while doing it.
jibeaux
@mistermix: The main problem I see there is that (up to) 15% is a damn high sales tax. The 15% excise tax isn’t high at all. Most places cigarettes are going to have a quite a bit bigger hit.
EconWatcher
It’s kind of weird. To me at least, this sudden softening in attitudes towards weed seems to come out of nowhere. Ten and maybe even five years ago no national politician dared to mention legalization. Now McCain does, and everybody yawns. What happened?
With gay rights, you could kind of see it coming: We in effect decided to have a nantional conversation about it, and once the conversation began, one side had actual arguments and claims for fairness, and the other side had nothing.
But the sudden respectability of weed has me shaking my head. Happy (the only reason I don’t indulge is because it’s illegal)—but baffled.
greennotGreen
Is there anything in these new laws that prohibit individuals from growing marijuana? Any doofus can grow marijuana under lights or outside in the summer. It is, after all, a weed. So why pay money for it?
negative 1
@EconWatcher: It’s always polled well, and to me it seems like the kind of question that people would lie to a pollster about. I think the gay marriage issue (lately anyway) is a good comp — once people see that it has a chance to pass it seems like it was more popular than was being portrayed.
mistermix
@jibeaux: Ah, so maybe the CO taxes aren’t that out-of-line.
Sly
Rather, the conservative Grover Norquist, as always, wishes to deny the state any and all revenue streams so that it loses its effectiveness at policing the market.
Rosalita
@greennotGreen:
probably. but fuck ’em why not grow it anyway.
RSR
Manufacturers should be able to deduct legitimate expenses, and taxes should be consistent with those levied on alcohol and tobacco.
Are citizens allowed to grow their own pot? What about tobacco?
Homebrewing is finally permitted in all 50 states.
.
jibeaux
@greennotGreen: That’s a good question. The only deterrent I can think of is that probably people would try to steal it, and some folks probably wouldn’t want to plant an “attractive nuisance” in their yard?
Ben Cisco
@raven: 1987-88.
Smiling Mortician
@greennotGreen: Don’t know about Colorado, but in Washington we’re in a weird limbo where it’s legal to possess up to an ounce but everything else (buying, selling, growing) is still illegal. So we can have weed and we can smoke weed, but only if it magically appears in fairly small quantities during the night or something.
Mile High Dem
As someone at ground zero of all of this in Denver—there are four dispensaries within two blocks of my apartment, and there used to be eight—I have to say tax the shit out of it.
There’s a somewhat lengthy local backstory here about the marijuana lobby/industry’s mendacity and fecklessness, and I’ve included it below. Their actions really piss off some people, like me, who oppose the war on drugs and think that no one should be prosecuted for smoking a joint, but have come to loathe them for their lying. The short version is, they’ve made a habit of backing out of deals with putative allies, when they’re not actually stabbing them in the back.
It’s worthing delving into, as I’ve done below. The leaders of the pot lobby here are largely the local smug libertarian assholes that haven’t grown up since sophomore year and are big on PR stunts. The really are the Radical Right twerps who recite Ayn Rand but are too cool to call themselves Republicans, but on taxes, gun regulations, abortion rights, education policy, they’re just as bad as their true allies, the Focus on the Family radicals and Norquist-types in the GOP.
When the marijuana people put their initiative on the ballot to allow for retail sales, they always talked about how much tax money it could raise. It was a key part of their argument and campaign. New taxes were called for in the ballot language, with the first $40 million earmarked for school construction.
The measure passed by 250,000 votes, so I don’t know how critical that language was to its passing. Anectdoteally, I know it helped with a lot of moderate voters, and it gave advocates the appearance of responsibility and reasonableness.
The way the measure was written, it told the state legislature to write up new rules and create new laws to enact the taxes. Sounds reasonable, right? But because of the ridiculous Taxpayer Bill of Rights in the state Constitution, public policy doesn’t work that way. Every tax increase needs to be approved by voters in special elections, and they vote on the complete measure—i.e., they can’t just say raise taxes for schools or cops, it has to say how much is to be raised by what means over what period, etc. Like getting taxes raised in Congress, it’s a battle royale, although in Colorado a decent number of Chamber of Commerce-type Republicans do support some local and state measures. Building a broad coalition is key, especially because supporting tax increases often costs politicians their careers.
Since the law passed a year ago, the marijuana lobby has been all but silent in supporting the tax campaign. We’ll be voting on the tax part of the marijuana laws in November, and marijuana advocates have been pretty useless supporting the campaign so far, when they’re not campaigning against it, like they were Monday as mentioned in the story from the Atlantic.
So the story isn’t about local governments getting greedy. If the local and state tax measures don’t pass, essentially half the amendment is a dead letter. The pot crowd will get their shops, but the tax money for schools will just have been window dressing, and the cities and state might not even get the revenue to cover the costs of implementing the new regulations and inspections. I didn’t see any mention of that in coverage of the rally, BTW.
And oh yeah, that recall election this week that the Dems lost? Yes, the NRA was the driving force behind it, but there were a lot of local factors the media never discussed. The marijuana laws were part of it—now former Senate president John Morse, one of the recall losers, tried to push through a bill that would have made enacting the reforms dependent on the tax measure getting approved in November. In other words, the whole constitutional amendment would have to be enacted, or none of it would be.
The marijuana lobby sure didn’t like that. One national group called him the worst legislator in America. The Radical Right didn’t forget that, putting it countless ads and robocalls over the past two weeks designed to push down Democratic turn out in the special election.
Yeah, a lot of Colorado progressives should be pretty pissed off and bitter at these jokers.
EdTheRed
@raven: Except that line is from the Nina Simone version, and not in the Steppenwolf version. The Steppenwolf line was “Ah but the pusher ruin your body / Lord, he’ll leave your, he’ll leave your mind to scream.” Which, frankly, makes a bit more sense.
Mile High Dem
@mistermix: Actually, big taxes on legal sales were part of the reason the measure passed last year. I wrote about it in another (looonng) post that’s in moderation, but the gist of the political campaign last year was “let us sell it legally and tax it to raise money for schools.”
Guess which part of that activists haven’t said much about over the past year?
EDIT: I just cleared the moderation. -SG
flukebucket
40% is not too much when you consider that they can kill your dog and grandma and take your house if they catch you with it now.
Legalize it, tax the hell out of it and let’s get on with it. Win / Win
NCSteve
As far as I’m concerned, this is where the rubber meets the road and we separate the real hippies from the gun-toting libertarian Randian sociopath asswipes who seem to dominate the “dispensary” business.
Tax it. Tax the shit out of it. Tax the hell out of it just the way we tax alcohol and cigarettes. Production costs and barriers to entry are low and the last goddamn thing the country needs is taxpayers subsidizing the rise, through business deductions and credits, of yet another new monopolistic, pathologically lying business empire run by sociopaths like the tobacco industry was (and still is).
Redshirt
It can’t be taxed too high or the black market will just continue as usual. I think alcohol/cigarette tax levels are where it should be.
Paul in KY
Legalize it. Tax it.
Joey Maloney
The only break I want to give Grover Norquist is for him to be beaten insensible before we all take turns stubbing out joints on his body.
kindness
@jibeaux: When they are taxing Bibles at that rate then I will agree it’s OK to tax Cannabis at that level.
No, marijuana should be taxed at the same rate as everything else. No different.
@greennotGreen: Not everyone has a garden. Many city folk have no place to grow it.
Jebediah
@greennotGreen:
That’s true, but to grow high-quality weed requires fiddly, daily attention. For a lot of people, it’s worth it to pay somebody for strong, nice-smoking weed rather than putting all that time in -or, alternatively, smoking what will be little better than ditch weed.
someofparts
Times are changing so fast that now I can start worrying that my fears about price-gouging will come true. Legalize it and the REAL crooks come out of the woodwork.
Omnes Omnibus
@kindness:
Which everything else? Food items that often aren’t taxed at all? Regular sales tax? Excise taxes like booze and cigs?
greennotGreen
@kindness: Someone I know (not me, of course) used to grow it in a closet with a fluorescent light. You can get at a pound out of a skimpy plant, probably a lot more out of a well grown one.
greennotGreen
@Jebediah: Yeah, I forgot about brown thumbs. Somebody (not me, of course) who used to grow marijuana in a closet still grows non-intoxicating plants under lights.
Redshirt
@greennotGreen: While your point is true, convenience and variety will be a huge draw. You could make your own beer if you wanted to, but only dedicated hobbyists do so. I would imagine home grown weed would be the same – sure, you could grow some skinny plant in a closet, but why not just go down the store and buy something good? If you’re into it, though, you bet people will still grow high-end weed at home.
I wonder how the law will deal with these people, especially if they’re selling and not paying taxes.
Yatsuno
@Omnes Omnibus: I’d say similar rates to alcohol and cigarettes, since at least in WA that’s how they will be treated under other parts of the law. I do NOT want private dispensaries though. That is already a stupid boondoggle that the voters are whining about, even though they approved privatisation.
Redshirt
@Yatsuno: What’s bad about private dispensaries?
EthylEster
Mark Kleiman states that treating MJ as a tax-revenue cash cow is the path to failure.
I don’t want to fail.
EthylEster
@Redshirt: growing privately is verboten by the WA law.
Redshirt
@EthylEster: Do you have a link to the law, or a summary of it? Does one have to get a license from the state in order to grow? Where will the stores get their supplies?
burnspbesq
Marijuana is California’s biggest cash crop, by far, and those unimaginably rich growers are some of our worst polluters. I am all for regulating and taxing the living fuck out of them.
kindness
@greennotGreen: I know people that do the indoor garden thing. Nowdays they use 1000w + grow lights that end up costing you $300 a month in electric bills for a small grow. Out here in CA a bunch of growers with commercial aspirations end up getting caught because they’ll rent a house and then tap into the electric line outside the house so they don’t have to pay those bills. And even if they did pay those bills the utility companies now days see the spike in usage and notify the police. Not my thing. Don’t want the hassle nor the money (let alone the sketchy types you’d have to run with to sell the stuff).
A small outdoor plot is too easy. A few plants is enough for me & mine with plenty left over for gifting. And you don’t have to mess with it every day to get top notch results. Couple times a week in the month or so leading to harvest. Let us just say that all my weekends are booked between now and sometime in October.
@burnspbesq: you are delusional. Yes there are assholes but most folk aren’t rich, just getting by and most folk return to the same place year after year so trashing the place isn’t in their long term interests. But there are some that do that. Not most. Be kind. You aren’t.
EthylEster
@Redshirt: There’s a wiki article devoted to it.
http://en.wikipedia.org/wiki/Washington_Initiative_502
Bob In Portland
@Smiling Mortician: I’m wondering if Oregon police are going to have a roadblock on bridges when Portlanders go across the river to get some when the stores finally open in Vancouver. Of course, Oregon legislators are making noises about moving marijuana from medication to meditation too.
As far as taxes go, if they make it too expensive then they’re only going to encourage the black market to continue. There still are moonshiners and trucks running cigarettes from the South to NYC.
moderateindy
@raven:
Written by the great Hoyt Axton, also the author of Joy to the World, Never Been To Spain, Greenback Dollar, and the No No No song (also appropriate for this thread). His mother actually co-wrote “Heartbreak Hotel”.
As far as taxing it goes, it is a no-brainer for a high sin tax. The tax should be high enough so that it deters smoking it all the time. Let’s be honest, smoking Dope is different than drinking alcohol, in that one can have some drinks, truly only one, or two in an hour, with minimal effect. With the power of today’s weed a single hit, and you’re stoned. Although I suppose one of the many benefits of a free market would be varying degrees of potency, like with booze. Which, personally, I’d find to be positive as it would bring back a more communal aspect of dope smoking that has been reduced since the dope has gotten so powerful that smoking so little gets you thoroughly baked.
Still having weed legal will mean many more stoned drivers, which means as a society we will want to curb that activity. Making it cost prohibitive to be eternally baked is one of the few ways to do that, at least till they come up with a test that can accurately tell if a person is currently under the influence at the time they were stopped. Of course, there are ways that cops can test a persons cognitive abilities, and such, but I rather rely on science than some cops opinion to decide my guilt.
Nancy Irving
I wouldn’t infer any sea-change in the culture from Norquist’s being against taxing dope.
Norquist would argue that selling your soul to the Devil should be tax-free, too.