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Colorado Pot Tax Proving More Lucrative Than Expected

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Re: Colorado Pot Tax Proving More Lucrative Than Expected

#21

Post by hershel »

sudomal wrote: post #6
gopalv wrote: post #2

Ugh, is this going to look like Big Tobacco in 50 years? Vice taxes and revenue streams to be kept alive for the district? That's going to be such a kick-in-the-backside for everyone who just wanted to decriminalize it & stop putting people away for years.

I suspect that legalisation of weed is going to be a blip in history and they'll heavily tax it to phase it out. It just doesn't make sense to encourage people to breathe in smoke.

Marijuana is a drug that encourages people to be less political active(the "laziness" effect) . I would think governments would like such a thing in politically unstable times.

Re: Colorado Pot Tax Proving More Lucrative Than Expected

#22

Post by btilly »

chimeracoder wrote: post #12
sudomal wrote: post #6

Earlier quoted context omitted.

I suspect that legalisation of weed is going to be a blip in history and they'll heavily tax it to phase it out. It just doesn't make sense to encourage people to breathe in smoke.

While I disagree that legalization will be "just a blip", it's interesting to note that the original law that prohibited marijuana in the US was actually a cleverly worded tax law: https://en.wikipedia.org/wiki/Marihuana_Tax_Act_of_1937 Basically, marijuana was legal, but you were required to purchase a tax stamp (that was never issued) in order to prove that you had paid taxes on it. There were many reasons for this…

That is because Congress has enumerated powers, and the Commerce Clause was then accepted in the intended meaning of only controlling commerce with other countries, between the states, and with Indian tribes. Sales inside of a state are obviously out of the purview of that clause.

Today, of course, the Commerce Clause is interpreted insanely broadly to cover everything from civil rights to environmental protection. Worthy causes, to be sure, but not within the intended purview of, [The Congress shall have Power] To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes;

Re: Colorado Pot Tax Proving More Lucrative Than Expected

#23

Post by greghinch »

tomphoolery wrote: post #5
gopalv wrote: post #2

Ugh, is this going to look like Big Tobacco in 50 years? Vice taxes and revenue streams to be kept alive for the district? That's going to be such a kick-in-the-backside for everyone who just wanted to decriminalize it & stop putting people away for years.

I don't believe it will be quite the same. Big Tobacco really profits off the fact that most people can't grow tobacco year round, and thus must purchase it at some point throughout the year. That basic fact is what ensures those companies never die. Tobacco was always grown outdoors, and there was never a need to research how to cultivate it clandestinely, be it indoors or small numbers. On the other hand, pot can b…

I can brew my own beer relatively easily in the comfort of my own home, for the final price of less than $1 per beer in ingredients. I still buy much more beer at the store than I brew.

Re: Colorado Pot Tax Proving More Lucrative Than Expected

#24

Post by cdash »

chimeracoder wrote: post #14

It'll be interesting to see how this windfall tax revenue is actually spent. Under Amendment 64, the Colorado state constitution requires that the first $40MM of revenue each year be allocated towards public schools[0]. To my knowledge, the rest of the tax money has not yet been earmarked, so it's currently up for grabs. [0] https://en.wikipedia.org/wiki/Colorado_Amendment_64 .

I think I had read some of it will be going to drug rehabilitation/substance abuse prevention programs.

Re: Colorado Pot Tax Proving More Lucrative Than Expected

#25

Post by nerfhammer »

hershel wrote: post #21
sudomal wrote: post #6

Earlier quoted context omitted.

I suspect that legalisation of weed is going to be a blip in history and they'll heavily tax it to phase it out. It just doesn't make sense to encourage people to breathe in smoke.

Marijuana is a drug that encourages people to be less political active(the "laziness" effect) . I would think governments would like such a thing in politically unstable times.

I don't think governments have big evil long-term schemes like this

Re: Colorado Pot Tax Proving More Lucrative Than Expected

#26

Post by chimeracoder »

glesica wrote: post #19
chimeracoder wrote: post #13

Earlier quoted context omitted.

> Vice taxes and revenue streams to be kept alive for the district? In Colorado, the first $40M in taxes each year are required to be allocated towards school funding, per the state constitution. The not-so-subtle goal is to make it politically painful to repeal this amendment, as any attempt to criminalize marijuana again can be spun as an attempt to cut funding for education. > That's going to be such a kick-in-the…

I think the concern was that we're just replacing illegal cartels with legal cartels. The tax revenue thing is also kind of misleading. First, that number is apparently fixed (based on your wording, I'm not familiar personally), but the there is, presumably, no upper-bound on the actual revenues, so as revenues increase, a smaller percentage goes to education. Second, vice taxes tend to be regressive, the poor pay a…

> I think the concern was that we're just replacing illegal cartels with legal cartels.

Agreed, but legal cartels are (marginally) better in that they are forced to operate under the "light of day". This doesn't automatically solve all the problems in se, but it's an important step.

> First, that number is apparently fixed (based on your wording, I'm not familiar personally), but the there is, presumably, no upper-bound on the actual revenues, so as revenues increase, a smaller percentage goes to education.

Yes, I'm just pointing out that the motivation for the tax was not the same as the motivation behind your typical "vice taxes". It was proposed by the people who wrote Amendment 64 (proponents of legalization).

Naturally there's a tradeoff to be made, as you point out, but IMHO, it was a clever attempt to construct the amendment "defensively", to mitigate the risk of people trying to repeal it.

The size of the tax, and what to do with any excess revenues, are where one has to make a value judgement, and it really comes down to whether one thinks income should be redistributed from rich to poor, poor to rich, or neither. That's a separate discussion, though - I think almost anybody would agree that it's better to be debating the exact structure of the tax, than to be stuck debating whether or not we should force the drug trade to happen in a completely unregulated, untaxed, underground market.

Re: Colorado Pot Tax Proving More Lucrative Than Expected

#27

Post by nerfhammer »

carbocation wrote: post #3
gopalv wrote: post #2

Ugh, is this going to look like Big Tobacco in 50 years? Vice taxes and revenue streams to be kept alive for the district? That's going to be such a kick-in-the-backside for everyone who just wanted to decriminalize it & stop putting people away for years.

Regarding the health aspects of marijuana, we of course lack the wealth of knowledge that we now have on the detrimental effects of tobacco on pulmonary function and lung cancer risk. The experts with whom I have discussed this (a few pulmonologists) usually ask about marijuana smoke in the same breath as tobacco smoke, and consider it a probable carcinogen. Fun somewhat-related fact that I learned last week: a one h…

The deleterious health effects of cigarette smoke is the burning plant matter and not the nicotine, so it wouldn't be surprising if marijuana were in the same ball park of dangerousness.

Related is the danger of smoke from ordinary wood fire, see: http://www.samharris.org/blog/item/the-fireplace-delusion

Re: Colorado Pot Tax Proving More Lucrative Than Expected

#28

Post by cdash »

glesica wrote: post #19
chimeracoder wrote: post #13

Earlier quoted context omitted.

> Vice taxes and revenue streams to be kept alive for the district? In Colorado, the first $40M in taxes each year are required to be allocated towards school funding, per the state constitution. The not-so-subtle goal is to make it politically painful to repeal this amendment, as any attempt to criminalize marijuana again can be spun as an attempt to cut funding for education. > That's going to be such a kick-in-the…

I think the concern was that we're just replacing illegal cartels with legal cartels. The tax revenue thing is also kind of misleading. First, that number is apparently fixed (based on your wording, I'm not familiar personally), but the there is, presumably, no upper-bound on the actual revenues, so as revenues increase, a smaller percentage goes to education. Second, vice taxes tend to be regressive, the poor pay a…

I don't think you will find too much argument from people that want it legalized that they would not like marijuana taxed at a normal rate.

I just think that it is a battle to fight another day. It is hard to argue that the poor are worse off buying marijuana legally rather than illegally, especially when the prices start to fall below what you would pay on the streets which it will as soon as the supply is able to meet the demand. Supply is pretty low because the only companies who have licenses are medical marijuana companies that already had a license, more companies will become licensed soon.

Added to the fact that in Colorado I think anyone is currently allowed to grow a small number of plants for themselves without being licensed and they can end up not paying any tax.

Re: Colorado Pot Tax Proving More Lucrative Than Expected

#29

Post by gizmo686 »

jmccree wrote: post #15
chimeracoder wrote: post #12

Earlier quoted context omitted.

While I disagree that legalization will be "just a blip", it's interesting to note that the original law that prohibited marijuana in the US was actually a cleverly worded tax law: https://en.wikipedia.org/wiki/Marihuana_Tax_Act_of_1937 Basically, marijuana was legal, but you were required to purchase a tax stamp (that was never issued) in order to prove that you had paid taxes on it. There were many reasons for this…

Interestingly enough also the way (pre-ban) machine guns and grenades are managed by the feds. Legal, but expensive and time consuimg tax stamp required. Obamacare fines were also considered to be a tax. Taxation is limitless.

On Obamacare. My understanding is that the Obama administration originally tried to justify the law under the commerce clause, and when that failed used taxation as a (relativly) long shot strategy.

Re: Colorado Pot Tax Proving More Lucrative Than Expected

#30

Post by erichurkman »

chimeracoder wrote: post #13
gopalv wrote: post #2

Ugh, is this going to look like Big Tobacco in 50 years? Vice taxes and revenue streams to be kept alive for the district? That's going to be such a kick-in-the-backside for everyone who just wanted to decriminalize it & stop putting people away for years.

> Vice taxes and revenue streams to be kept alive for the district? In Colorado, the first $40M in taxes each year are required to be allocated towards school funding, per the state constitution. The not-so-subtle goal is to make it politically painful to repeal this amendment, as any attempt to criminalize marijuana again can be spun as an attempt to cut funding for education. > That's going to be such a kick-in-the…

> In Colorado, the first $40M in taxes each year are required to be allocated towards school funding, per the state constitution.

Won't this end up like lottery funding "education" in most states? [1] A guaranteed $40M in funding to schools means the legislature will simply reduce funding by $40M and move the balance around the general fund to other initiatives.

I'm not arguing additional tax money is bad, but we shouldn't pretend this will product a windfall of available money for the Colorado school systems.

[1] http://www.washingtonpost.com/blogs/answer-sheet/post/mega-m...

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