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 Post subject: How would you tax pot?
PostPosted: Sat Oct 19, 2013 12:55 am 
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This is a subject that I really find fascinating, because there's really nothing that I can think of to compare it to in the past 50 years...

Both Washington and Colorado have legalized marijuana, and as a result, something that used to be totally black market is now becoming a legit industry -- I believe Colorado now has a Marijuana Czar as a state official to overlook the whole thing. I bet Yakov Smirnoff has a good joke about that in Branson, but I digress.

Washington is planning a 25% tax on each of the grower, the processor, and the distributer. There will also be the sales tax on the last leg of that (8.75), so overall it ends up being around a 45% tax to the consumer (I've heard as high as 58%, but there's propaganda on both sides of this debate.) So the problem there is that a legal ounce is estimated to cost you $482 in Washington ($723 in their worst projection, citation below), but the black market is running less than $250 an ounce.

I think states have looked at tobacco as the industry to mirror with this... Washington charges about $3 per pack as state tax. I think the thing they are overlooking is that there was never a black market infrastructure in place to handle moving tobacco... it has always been legal, and until the past twenty-five years or so, it really hasn't been taxed severely. I am sure there is some sort of black market for cigs in Washington btw, I just don't think it makes up a very significant percentage of total cigarettes consumed. If I am wrong, I apologize.

For pot, however, all the black market infrastructure is in place, and probably in place pretty well. If the difference in price ends up being nearly double, I can't see people leaving their current source in order to go shopping at some store. Once you buy it, will there really be a way to tell that it's legal vs. illegal? Personally, I would think it better to set a fixed amount per ounce -- say $30? -- that goes to the government. Let the market decide what the price should really be... if it ends up balancing out where a legal store sells it for $280 an ounce and the black market sells it for $250 an ounce, people may consider the cost worth the price of avoiding any hassle from an illegal purchase. Once you are able to break down the cost benefit of running the black market for a while, and it slowly decays, you can raise those costs and you don't have to deal with fighting an established distribution chain.

Cite: http://www.forbes.com/sites/jacobsullum ... gislation/

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PostPosted: Sat Oct 19, 2013 9:40 am 
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I think your last paragraph sums it up. Once the dealers and growers are out of business for a year or so you can do what you want with the price.

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PostPosted: Sat Oct 19, 2013 10:45 am 
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Should be a big cost to acquire an annual license to grow it. The size of the grow farm can easily be regulated, so they know how much is being supplied.

Then go ahead and place a 50% tax on it at the retail level.

call it the Munchie Tax :P

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PostPosted: Sat Oct 19, 2013 12:32 pm 
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yeah just have a growing tax (which is still kind of invasive as you've gotta report how much you've got, and if that's public record and you're sitting on pounds of the kill, welp, somebody might find out and come a-knocking cuz there's still gonna be some baseline level of monetary value to weed even if you can go down to your liquor store and pick up a pack of marlboro green-n-golds)

</psychoticrambling>

<zombie>Yes... sell it at shops and have some sort of a novel growtax cuz 98% of smokers won't wanna invest time/$$$/etc into growing something they can buy as affordably as a $3 40oz of malt liquor at the liquor store.

</horribleposting>
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:lol:


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PostPosted: Sun Oct 20, 2013 9:32 am 
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When you purchase alcohol as a retailer from a distributor there are 3 copies of the receipt. One for retailer, one for distributor and one gets sent to the state. couldnt be easier to track.

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PostPosted: Sun Oct 20, 2013 11:53 am 
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If you think it's hard to get a handle on now, wait until counties and municipalities start tacking on various sin taxes. I know that in retailing cigarettes, all but the 8-10% sales tax and your markup is included in what you pay to the distributor, including the county and state tax for the address of the retail location. Do not know about municipalities. This is also true of you buy from Costco, Badger Murphy, etc. You have to provide DuPage (for example) documentation to by the cigarettes with the DuPage tax stamp and price. if you turn around and try to sell those in Cook County, and get caught, your going to have big problems.

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PostPosted: Sun Oct 20, 2013 11:58 am 
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You don't tax it son, you smoke it!

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PostPosted: Mon Oct 21, 2013 9:47 am 
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1500%

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PostPosted: Mon Oct 21, 2013 9:50 am 
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Scorehead wrote:
1500%! Only the lazy and unemployed do drugs in the hood.

Fixed

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PostPosted: Wed Oct 23, 2013 10:43 am 
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newper wrote:
This is a subject that I really find fascinating, because there's really nothing that I can think of to compare it to in the past 50 years...

Both Washington and Colorado have legalized marijuana, and as a result, something that used to be totally black market is now becoming a legit industry -- I believe Colorado now has a Marijuana Czar as a state official to overlook the whole thing. I bet Yakov Smirnoff has a good joke about that in Branson, but I digress.

Washington is planning a 25% tax on each of the grower, the processor, and the distributer. There will also be the sales tax on the last leg of that (8.75), so overall it ends up being around a 45% tax to the consumer (I've heard as high as 58%, but there's propaganda on both sides of this debate.) So the problem there is that a legal ounce is estimated to cost you $482 in Washington ($723 in their worst projection, citation below), but the black market is running less than $250 an ounce.

I think states have looked at tobacco as the industry to mirror with this... Washington charges about $3 per pack as state tax. I think the thing they are overlooking is that there was never a black market infrastructure in place to handle moving tobacco... it has always been legal, and until the past twenty-five years or so, it really hasn't been taxed severely. I am sure there is some sort of black market for cigs in Washington btw, I just don't think it makes up a very significant percentage of total cigarettes consumed. If I am wrong, I apologize.

For pot, however, all the black market infrastructure is in place, and probably in place pretty well. If the difference in price ends up being nearly double, I can't see people leaving their current source in order to go shopping at some store. Once you buy it, will there really be a way to tell that it's legal vs. illegal? Personally, I would think it better to set a fixed amount per ounce -- say $30? -- that goes to the government. Let the market decide what the price should really be... if it ends up balancing out where a legal store sells it for $280 an ounce and the black market sells it for $250 an ounce, people may consider the cost worth the price of avoiding any hassle from an illegal purchase. Once you are able to break down the cost benefit of running the black market for a while, and it slowly decays, you can raise those costs and you don't have to deal with fighting an established distribution chain.

Cite: http://www.forbes.com/sites/jacobsullum ... gislation/



$250 is a low number. $350-400 is much more accurate. I guess if you are buying ditch weed you can get it for cheap, but anyone selling ounces of good weed is charging at a minimum $350, at least in Chicago.

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PostPosted: Wed Oct 23, 2013 10:45 am 
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Finally, a way to tax those who don't pay income taxes! This is great for America.

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PostPosted: Wed Oct 23, 2013 4:06 pm 
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bigfan wrote:
Should be a big cost to acquire an annual license to grow it. The size of the grow farm can easily be regulated, so they know how much is being supplied.

Then go ahead and place a 50% tax on it at the retail level.

call it the Munchie Tax :P


did you read the original fucking post? the whole point is that they are overtaxing it at 50% levels, which doesnt do shit to take away the black markets.

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PostPosted: Wed Oct 23, 2013 4:09 pm 
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Boilermaker Rick wrote:
Finally, a way to tax those who don't pay income taxes! This is great for America.


we only tax people who work. those people deserve to pay for everything in the government.

its not like we should tax sales, which would make EVERYONE pay for the government. that would mean corporations and politicians and drug addicts would have to pay!

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