Marijuana Tax Up In Smoke? Don't Worry, Feds Plot 50% Tax

[mfcorey1]

Marijuana activists look to Colorado as a true leader, with legalized recreational use and tiered tax models. Coloradans and activists nationwide thought legalizing marijuana would mean huge tax revenues. Nationwide, there is a near intoxication promising money, jobs, appreciating real estate, and tax revenues that could achieve so much for so many.

Naysayers worry about public health risks, especially for young people. Yet even some naysayers find copious tax revenues alluring. In Colorado, the governor’s office estimated it would collect $100 million in taxes from the first year of recreational marijuana. The state’s economists were more conservative, estimating $67 million. They recently revised it downward to call for taxes of $58.7 million from recreational marijuana.

Now, Colorado’s first year tax haul for 2014 recreational marijuana is a disappointing $44 million, causing some to say that Colorado’s marijuana money is going up in smoke. Yet perhaps that is premature. Colorado was first to regulate marijuana production and sale, so other governments are watching closely. Although disappointing, the $44 million is nothing to sneeze at. Colorado also collected sales tax on medical marijuana and various fees, for a total of about $76 million.

http://www.forbes.com/sites/robertwood/2015/02/16/marijuana-tax-up-in-smoke-dont-worry-feds-plot-50-tax/

[Warpy]

1. 50% tax?

They must be dying to keep the drug gangs and black market in business!

[Scuba]

2. +1 They're either complicit in the illegal market, or stupid. Or both.

[Comrade Grumpy]

3. Ok, this is kind of misleading.

1. The article references a bill introduced, not a federal policy.

2. The bill was introduced in the last Congress, not this one. (I don't know if it has been re-introduced in this Congress).

3. The bill references a 50% excise tax on the sale from the initial producer to the processor. If you're growing pot legally, and especially if you're growing it outdoors, it ain't that expensive. Costs would be in the range of $20-$30 an ounce, something like that. So a 50% tax means that ounce then costs $30-$45. That's still dirt cheap.

4. Completely legal marijuana may (some say) require excise taxes to keep it from being too damned cheap. There's some thought being given to a federal excise tax that only kicks in if a state doesn't tax it, thus ensuring a floor.

[outside]

4. Why

are they taxing sick people?

"Colorado also collected sales tax on medical marijuana and various fees."

[Donald Ian Rankin]

5. Here's an article on the taxes on tobacco, for comparison.

http://en.wikipedia.org/wiki/Cigarette_taxes_in_the_United_States#Proportion_of_taxes_in_cigarette_prices