Sullum analyzes Colorado’s new marijuana taxes, which passed by an overwhelming margin last night:
[M]arijuana will be one of the most heavily taxed consumer products in Colorado, taxed at a much higher rate than alcohol even without taking local levies into account. That situation is hard to reconcile with Amendment 64′s aim of taxing marijuana “in a manner similar to alcohol,” and it surely makes no sense in light of the two products’ relative hazards, which were a major theme of the legalization campaign. If legislators take full advantage of their new tax authority, marijuana in Denver, the center of the retail cannabis industry, will be hit by a 15 percent excise tax plus sales taxes totaling 38 percent (including standard and special state and local taxes). With taxes that high, the state-licensed outlets may have trouble competing with the black market and with homegrown marijuana. (Colorodans are allowed to grow up to six plants at home and share the produce, one ounce at a time, “without remuneration.”) Legislators may find that if they set taxes too high, the result will be less revenue rather than more.
Pete Guither sees an upside to the taxes:
While those taxes are significant (and significantly higher than alcohol taxes), and I’m concerned that the state do what it can do encourage legal channels at the beginning rather than discouraging them, still I think that smart producers will still be able to achieve a price point that will satisfy purchasers who would like to buy legally. And the taxes will help the political future of legalization.
Finally, Nicole Flatow notes the marijuana news from yesterday’s election:
By a landslide, Portland became the first east coast city to legalize marijuana Tuesday, in a measure that removes all penalties for small-quantity, adult marijuana possession, but does not decriminalize production or sale of pot. And three Michigan cities passed measures to remove criminal punishment for marijuana possession, bringing the number of Michigan localities that have decriminalized marijuana to 14. In some of these localities, marijuana possession is still a civil infraction that typically carries a ticket and/or fine. But Lansing’s initiative, like Portland’s, removed all civil and criminal penalties.
Earlier Dish on marijuana taxes here.
(Photo: David McNew/Getty Images)
The Dish 