A Pot Tax Government Pusher Warning from California


Those who make a practice of seeking inconsistency in conservatives’ writings may have chuckled to themselves a couple days ago when I included the illegality of marijuana as one way that the government can trip people up in order to catch them in its web.  And in fairness, I have generally opposed the overtures of those who wish to legalize the drug in Rhode Island.

The reality is that I would like to get to the point that the government isn’t involved in behavioral scrutiny.  At the same time, though, I’ll insist that we be aware of the ground on which we’re standing before we start making leaps.  Like a tree around a sign, our culture has grown around and integrated into itself the reality of drugs’ illegality.  We can’t just rip it out, and we should give due consideration to the incentives of those who want to do so.

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Look to California:

Consumers will pay a sales tax ranging from 22.25% to 24.25%, which includes the state excise tax of 15%, and additional state and local sales taxes ranging from 7.25% to 9.25%.

Local businesses will have to pay a tax ranging from 1% to 20% of gross receipts, or $1 to $50 per square foot of marijuana plants, according to the Fitch report.

In addition, farmers will be taxed $9.25 per ounce for flower, and $2.75 per ounce for leaves.

The Fitch report says this combination of state and local taxes for consumers, retailers and growers could keep portions of California’s cannabis industry off the grid, where it has flourished for some time.”

California’s black markets for cannabis were well established long before its voters legalized cannabis in November 2016 and are expected to dominate post-legalization production,” said the Fitch report.

This isn’t an expansion of freedom so much as the government’s entering into yet another line of business that was once the purview of organized crime.  The legitimate, libertarian rationale for legalizing pot is, in my view, at odds with its use as a revenue engine for government.  Additional taxes on a substance are essentially a lesser value judgment, expanding an unhealthy freedom in order to use the profits in ways that very probably involve limitations on healthier freedoms.  They’ll sell you drugs only in order to use the profits expanding their ability to enforce much more pervasive laws, regulations, licenses, and dependency traps.

To get to legalization, we should take the path of a stronger culture and a more broadly limited government, not the dark ally in the bureaucracy that leads to the government pusher.