Marijuana tax defeats pupose of initiative

February 19th, 2013 by Ken

The State of Washington is wrestling with the legalization of marijuana and trying to determine what steps it needs to take to make the concept a reality.

Among the many questions is  – – How much to tax the product?

The Washington State Liquor Control Board is charge of making that determination, but it might want to take a look at cigarette taxes in this state.

Currently, cigarettes are have a  $3 a pack state tax.  That makes around $30 a carton.  That’s a high tax.  Many smokers pay the tax, but many others find alternatives.

Some go to Indian reservations where they can buy the cigarettes at a lower price.  Some go across the state border into Idaho or Oregon where they can get them at a cheaper price.  Some smuggle them in from Vietnam, China and other Asian countries.

All of these untaxed or lower taxed cigarettes are costing the state some $300 million in lost revenue every year from smokers who don’t buy licensed products.

That’s a lesson that the Liquor Board should take to heart.

If it decides to tax pot at a high level it will force users to find other, cheaper sources.  It could be growing their own, buying from street corner vendors or importing it from Mexico.   Those are all actions legalization was supposed to stop.

Right now the Liquor Board is proposing a 25 percent tax on the retail sales.  It’s also considering a tax on growers and another on producers.

The state needs to carefully consider its next move.  Tax the product too high and you force users to go elsewhere for their “legal marijuana.”

That defeats the purpose of legalization.

Posted in Business, Government, The Real News

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