State News

A tax too high?

 

<<<Oregon considers legalizing, taxing marijuana >>>

…By Shelby Sebens – Northwest Watchdog – April 2, 2013…

 

 

 

PORTLAND – As the momentum for marijuana legalization grows, lawmakers are seeing green through a new tax, but could those eyes for easy money be bigger than pot smokers can stomach?

Both Washington and Colorado, where voters approved legalizing weed in November, are still trying to figure out how to tax and regulate the potential cash crop.  And in Oregon, where lawmakers Tuesday were expected to hold their first hearing on legislation to legalizes marijuana, the tax dwarfs the excise tax on beer, wine and spirits.

Oregonians pay 8-cents tax per gallon on beer and 67 -cents on wine.  Spirits are taxed $24.63 a gallon, according to nodrinktax.com, an advocacy group that lobbies against increased alcohol taxes.

Medical marijuana is legal in Oregon, but voters in November struck down a proposal to legalize it for recreational use.  The National Cannabis Coalition helped draft House Bill 3371, which would allow adults over 21 to grow up to six plants and posses up to 24 ounces.

The proposed legislation would put a $35-per ounce tax on recreational marijuana, with the revenue going to schools and mental health services as well as the state’s general fund. (Emphasis added, just so you know the revenue can be spent anywhere.)

In Colorado, lawmakers plans to take up a bill that would tax cannabis and cap it until 2017, and in Washington all signs are pointing to a hefty tax there as well.

On the federal level, U.S. Rep. Earl Blumenauer, D-Oregon, is proposing a 50-percent excise tax on the first sale by a producer in his Marijuana Tax Equity Act of 2013.

Some people, however, fear that imposing a steep tax on legal marijuana would defeat the purpose of legalization and keep black-market dealers in business.

“There’s a pretty comprehensive or wide reaching culture change that’s going to have to happen in order for the new changes to fit with the current way that things are,” said Harris Kenny, a policy analyst who served on Gov. John Hickenlooper’s legal marijuana implementation task force.  “How will new rules, new polices, new taxes fit with the current reality on the ground?”

Harvard University economics professor Jeffrey Miron estimates Oregon could raise about $36 million a year, depending on the level of taxation.  Paul Stanford, who wrote the failed 2012 cannabis measure, has said his group estimated legalization could bring in about $200 million a year.

Washington officials have estimated their state will bring in $2 billion over five years, though recent reports have put that number lower at about $100 million a year, according to the Associated Press.

Kenny, who also is working as a consultant for Washington state as officials there try to figure out how to implement the new law, said figuring out how to tax marijuana is a big challenge but the societal shift could be more of a struggle.

“The biggest hurdle is that this is going to be a significant culture change both for folks in government and the public at large,” he said.  What’s not being talked about is how law enforcement, courts and the media will have to change their mindset on marijuana.  “It’s really hard to predict where things are going to go,” he said.

That culture change already is being tested in Oregon.  A billboard encouraging people to think about evidence supporting the notion that marijuana is safer than alcohol was vandalized shortly after it was put up in downtown Portland by the Marijuana Policy Project, a national organization advocating for legal cannabis across the country…

If lawmakers want to implement a successful legal marijuana market they’ll have to figure out how high is too high a tax for pot smokers just to keep buying their stashes illegally, Kenny said.

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