Marijuana tax take nearly double expected in Colorado • Hacker News Board

Re: Marijuana tax take nearly double expected in Colorado

#71

Post by digi_owl » Wed, Sep 16, 2015, 9:20 PM UTC

Sir_Cmpwn wrote: post #61

s_dev wrote: post #54

Earlier quoted context omitted.

In Ireland in 2008 we were warned the only two industries that would remain unaffected by the looming recession were the funeral and cigarette manufacturing industry. The two were absolutely stable the entire time almost every other industry brought in less tax revenue/revenue. Sin taxes can be some of the most stable sources of income as in the case of cigarettes and this is more evident during times of downturn whe…

Death is inevitable. Cigarettes are addictive - there's a physiological impetus to continue smoking if you're addicted. Marijuana is significantly less addictive, and it takes very little willpower to stop using it during times of hardship.

In particular as smoking seems to tie in directly with the stress response. Stress any smoker, and the first thing they want to do is to light one up. And what is more stressful than being "downsized"...

Re: Marijuana tax take nearly double expected in Colorado

#72

Post by rudolf0 » Wed, Sep 16, 2015, 9:27 PM UTC

peter303 wrote: post #46

AaronFriel wrote: post #34

This is good news and bad news. The funding for schools will be a boon to education in the state, and that's certainly not bad. However, I expect will almost certainly lead to decreased education funding from other revenue sources, and ultimately place education footing on less solid ground for years to come. It was brilliant PR move to earmark the tax revenue for education, there's no doubt about that. It's very har…

The silliest tax earmark was for anti-pot education, especially aimed at under 18. Seeing users and magazine ads everywhere saying it is good for adults, but how could you say its bad for teens then?

Almost all psychoactive drugs can negatively affect brains that are still developing.

Re: Marijuana tax take nearly double expected in Colorado

#73

Post by gingerlime » Wed, Sep 16, 2015, 9:29 PM UTC

moonchrome wrote: post #45

chipgap98 wrote: post #31

Earlier quoted context omitted.

Marijuana has an incredibly high tax in Colorado. IRC its like 25%

25% incredibly high ? Some European countries have higher VAT than that :(

nitpick, but I think only one country has higher VAT rate than 25% - Hungary with 27%

source: https://en.wikipedia.org/wiki/European_Union_value_added_tax

Re: Marijuana tax take nearly double expected in Colorado

#74

Post by s_dev » Wed, Sep 16, 2015, 9:30 PM UTC

Sir_Cmpwn wrote: post #61

s_dev wrote: post #54

Earlier quoted context omitted.

In Ireland in 2008 we were warned the only two industries that would remain unaffected by the looming recession were the funeral and cigarette manufacturing industry. The two were absolutely stable the entire time almost every other industry brought in less tax revenue/revenue. Sin taxes can be some of the most stable sources of income as in the case of cigarettes and this is more evident during times of downturn whe…

Death is inevitable. Cigarettes are addictive - there's a physiological impetus to continue smoking if you're addicted. Marijuana is significantly less addictive, and it takes very little willpower to stop using it during times of hardship.

For clarification I wasn't referring to the funeral industry as a "Sin Tax" -- I just included it because it was a quoted industry so we can agree to discard it. My point is "Sin Taxes" in the case of tobacco are extremely stable even if predictably dwindling. Tobacco is universally and legally available. Marijuana isn't as addictive but luxury goods/Sin Taxes have a whole different set of economic laws applying to them that makes them stable and both MJ and tobacco are luxury goods.

Re: Marijuana tax take nearly double expected in Colorado

#75

Post by domdip » Wed, Sep 16, 2015, 9:31 PM UTC

AaronFriel wrote: post #34

This is good news and bad news. The funding for schools will be a boon to education in the state, and that's certainly not bad. However, I expect will almost certainly lead to decreased education funding from other revenue sources, and ultimately place education footing on less solid ground for years to come. It was brilliant PR move to earmark the tax revenue for education, there's no doubt about that. It's very har…

Earmarking is PR, it has little to no effect on actual education budgets (beyond setting an irrelevant floor). Money is fungible and budgets for education are never actually indexed to revenue from a particular tax.

Re: Marijuana tax take nearly double expected in Colorado

#76

Post by thaumasiotes » Wed, Sep 16, 2015, 9:36 PM UTC

AaronFriel wrote: post #34

This is good news and bad news. The funding for schools will be a boon to education in the state, and that's certainly not bad. However, I expect will almost certainly lead to decreased education funding from other revenue sources, and ultimately place education footing on less solid ground for years to come. It was brilliant PR move to earmark the tax revenue for education, there's no doubt about that. It's very har…

> It was brilliant PR move to earmark the tax revenue for education

> The problem is that budgets will adjust to incorporate this earmark for future years

That's not a problem. It makes earmarking the tax revenue even more of a brilliant PR move, since you get the PR without misallocating your revenue.

Re: Marijuana tax take nearly double expected in Colorado

#77

Post by civilian » Wed, Sep 16, 2015, 9:36 PM UTC

AaronFriel wrote: post #44

aggie wrote: post #42

Earlier quoted context omitted.

Are sin taxes really that volatile? I don't have good data, but many people suggest marijuana (as well as alcohol) is counter-cyclical and demand is relatively inelastic. http://www.marketwatch.com/story/amid-the-stock-market-volat... edit: This study suggests alcohol is actually pro-cyclical (in Scandanavia). [pdf] http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.185...

Even a small (4-6%) change in revenue can wipe out inflationary increases in funding for education. Even if they're counter-cyclical, the evidence is that replacing education funding with something more volatile is risky, because it's replacing consistent funding with something that is based on market dynamics. In the case of marijunaa, it's largely cultural.

If we're looking to avoid volatile revenue streams, we should also avoid income taxes. But that's not really a starter, is it? http://taxfoundation.org/blog/new-sp-report-shows-income-tax...

A better solution would be to have a budget that accounted for potential volatility, and specified where surpluses should go, and where things should be cut from if revenues are down.

Re: Marijuana tax take nearly double expected in Colorado

#78

Post by hsod » Wed, Sep 16, 2015, 9:42 PM UTC

xienze wrote: post #37

chimeracoder wrote: post #27

Earlier quoted context omitted.

> The bad news is that this amount of revenue will become the new normal, i.e., future budgets will always assume this amount of revenue or more. That's good news, not bad news (for legalization advocates). It becomes the new normal, which means that if anybody wants to reverse course, the burden is on them to find alternative sources for $50-100MM in tax revenue. And a major chunk of the tax revenue is explicitly ea…

> It becomes the new normal, which means that if anybody wants to reverse course, the burden is on them to find alternative sources for $50-100MM in tax revenue. That "alternative source" is invariably tax increases. Politicians aren't terribly clever about these sorts of things. > And a major chunk of the tax revenue is explicitly earmarked for public education That's not at all an iron-clad guarantee of how the mon…

> That "alternative source" is invariably tax increases. Politicians aren't terribly clever about these sorts of things.

Tax increases have political cost (i.e. a politican or activist would have to expend political capital) so I'm not sure what your point is

Re: Marijuana tax take nearly double expected in Colorado

#79

Post by mzs » Wed, Sep 16, 2015, 9:43 PM UTC

darkstar999 wrote: post #59

cjensen wrote: post #57

Colorado's budget is a $27 Billion per year. Marijuana taxes fund 0.26% percent of the budget. "Big new revenue source" is plainly not an argument for legalization.

If $70 million isn't a "big new revenue source" then what is? Have there been recent tax changes in any other states that have surpassed this?

It is, another example is the cloud tax in Chicago, $12,000,000.00/yr projected.

Re: Marijuana tax take nearly double expected in Colorado

#80

Post by ac29 » Wed, Sep 16, 2015, 9:50 PM UTC

cjensen wrote: post #69

darkstar999 wrote: post #59

Earlier quoted context omitted.

If $70 million isn't a "big new revenue source" then what is? Have there been recent tax changes in any other states that have surpassed this?

Sure: California recently increased it's sales tax by 1%. Sales Taxes are 30% of the California budget, so that equates to a 3% change in revenue. That's more than 10X the revenue generation of Marijuana Taxes.

>California recently increased it's sales tax by 1%

If by "recently" you mean 2009, then yes. However that went back down in 2011. CA State sales taxes have been within ± 0.5% of 7.75% since 1991 (aside from a 1 year dip to 7%) [1].

[1] https://www.boe.ca.gov/sutax/taxrateshist.htm