"Cash-starved legislators are seeing dollar signs in dime bags — with talk that a tax on marijuana could pump hundreds of millions or even billions into budgets still reeling from the recession."
“I’ve seen some estimates in the high tens of millions, as much as $100 million for [Colorado],” said Rep. Jared Polis (D-Colo.), who’s pushing a federal legalization in Congress. Money like that could make a big difference, he said — including a “substantial dent in needed school improvements, particularly in poorer districts.”
Read more: http://www.politico.com/story/2013/03/buzzkill-cash-strapped-states-eye-pot-tax-89412.html#ixzz2OqobYqbP
To be sure, one of the major selling points of legalization proponents has been that it would offer the states some large new revenue, while getting the criminal elements off the streets.
"It’s long been a central argument of the pro-marijuana crowd: Get marijuana out of the hands of dope dealers, tax it like you do cigarettes, then sit back and watch the money pour in."
“We all know where the money from nonmedical marijuana sales is currently going,” said a narrator in a Colorado campaign ad from last year, nodding to Mexico. "It doesn't need to be that way. If we pass Amendment 64, Colorado businesses would profit, and tax revenues would pay for public services and the reconstruction of our schools."
"Dale Gieringer, director of California National Organization for the Reform of Marijuana Laws, estimates that legalizing pot would bring in at least $1.2 billion to his state alone. His study assumes a traditional sales tax plus an additional $50 levy per ounce of marijuana, which runs between $280 and $420."
Read more: http://www.politico.com/story/2013/03/buzzkill-cash-strapped-states-eye-pot-tax-89412.html#ixzz2Oqp7VdWW
Indeed, he claims that it can increase economic activity by a huge amount:
"His study argues that legalization could also generate $12 billion to $18 billion in new economic activity for California.
Some say that his numbers are way overboard:
"The skeptics’ response: What are you smoking?"
“This is not a cash cow that can solve anyone’s fiscal problems,” said Harvard economics professor Jeffrey Miron, a pro-legalization scholar at the libertarian Cato Institute who says Gieringer’s numbers are roughly three times what they should be."
“There is a lot of exaggeration about how big the revenue can be.”
"Advocates “want to be allowed to smoke in peace,” Miron said. But, they’re “nervous about making that argument. They’re afraid that argument won’t win the day, so they have focused in many cases on the revenue side.”
"Miron estimates that a nationwide legalization that taxed marijuana like alcohol and tobacco would mean $6.4 billion in new tax revenue — $4.3 billion for Uncle Sam and $2.1 billion for the states."
So part of it is the persuade law enforcement not to come down o it to hard.Still if they hope t raises taxes on the level of cigarettes let's hope they don't make taxes as high as cigarettes. There is the reasonable expectation that prices should fall dramatically-as the risk factor in the business is eliminated.
"When you go to legalize, you have reduced risk in producing and distributing the drug. That’s a real component of the monetary price of marijuana,” said Rosalie Liccardo Pacula, the co-director of the RAND Drug Policy Research Center.
"She expects prices to fall by 70 to 85 percent in both Colorado and Washington — and that means taxes, if levied as a percentage of price or value, will also fall considerably."
Read more: http://www.politico.com/story/2013/03/buzzkill-cash-strapped-states-eye-pot-tax-89412.html#ixzz2Oqx8Y13C
If you tax pot too much you defeat the purpose and drive users back to the black market. The legal market has to have an advantage. Then there's the danger that the federal government could swoop in at any moment and shut it down as it violated federal laws against marijuana use.
In Colorado, lawmakers on a pot legalization panel met Friday to brainstorm how to tax it. The voter-approved November ballot initiative called for an excise tax of no more than 15 percent but didn’t specify a levy. Last week, a statewide task force on legalization recommended they levy an excise tax and a sales tax of up to 25 percent."
"Colorado’s task force also advised Gov. John Hickenlooper and Colorado’s congressional delegation to push for a federal tax code modification in Washington, D.C., that would allow the state’s marijuana businesses to claim tax deductions. Companies selling illegal substances are currently barred from receiving federal deductions and credits."
"Under Colorado’s constitution, voters will have to approve whatever statute lawmakers come up with in the state’s November 2013 elections."
"The Colorado Center on Law and Policy last August estimated that legalization would bring in $24 million in excise tax revenue, $8.7 million in state sales tax revenue and $14.5 million in local tax revenue.
Washington’s Office of Financial Management estimates that marijuana revenues levied on growers, processors and retailers will bring in just over $565 million in 2017."
Read more: http://www.politico.com/story/2013/03/buzzkill-cash-strapped-states-eye-pot-tax-89412_Page2.html#ixzz2Or1wiYvW
There are also questions about the cost of legislation:
"Then, there’s the question of how much it will cost to regulate the newly legalized recreational drug — an expense that will likely come from marijuana taxes themselves."
Despite the questions I'm hoping the experiment is successful and that other states are tempted to get on board-and that momentum comes for finally making it legal nationally. There is already some support in Washington D.C.-probably not enough yet. Still, Rome wasn't built in a day.
"That’s where Reichert, a former cop, sees an issue."
“I don't think the revenue they raise will be near enough to cover the cost of regulating pot stores,” he told POLITICO. “What I’m hearing from the police chiefs and sheriffs is that this is going to cost us more money to monitor those rules and regulations.”
"Although Colorado and Washington are the only states to have legalized recreational marijuana use so far, others could follow. Oregonians defeated a marijuana legalization ballot measure last November, but lawmakers there will hear testimony next week on a proposal legalizing and taxing pot at $35 per ounce, with supporters saying new revenue will beef up money for schools and mental health programs."
Despite the questions I'm hoping the experiment is successful and that other states are tempted to get on board-and that momentum comes for finally making it legal nationally. There is already some support in Washington D.C.-probably not enough yet. Still, Rome wasn't built in a day.
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