Death By Taxes: A Government-Imposed Condition
The dim California legislators taxed legal pot bigtime, with not a thought to how that might affect whether people buy their pot in legal venues or on the black market.
Um, duh!
I take pot pills to stave off an impending migraine, but they are so expensive -- about $9 per -- that I have to feel pretty damn sure there's head hell a'coming to take one.
Patrick McGreevy writes in the LA Times:
California lawmakers on Friday revived a proposal to temporarily cut taxes on marijuana to boost a legal market that one official said is "on the brink of collapse," drawing encouragement from Gov. Gavin Newsom as he seeks to overhaul state pot regulators.The bill would cut the state excise tax on marijuana sales from 15% to 11% for three years while eliminating a cultivation tax for that period. Similar legislation has been shelved in the last two years, with Newsom saying he felt it was too soon after legalization to make changes to the law.
But the governor signaled last week that he might be changing his mind, proposing in his new state spending plan a shakeup of the agencies that regulate cannabis sales as well as a streamlining of the method of collecting taxes, and saying he is open to considering other measures to boost a legal industry created when California voters approved Proposition 64 in 2016.
"The governor's office through its proposed budget has shown that it understands action needs to be taken," said Assemblyman Rob Bonta (D-Alameda), a lead author of the new bill, who noted that an estimated 75% of marijuana sales in the state continue to come from the black market. "With these steps, we believe that we will be supporting the regulated marketplace for cannabis in California. It will also help reduce and shrink the unlicensed, illicit market."
Perhaps I'm wrong about this, but maybe people who are getting their pot illegally now have a system they're not going to ditch if legal pot costs come down a little.
Government is so capable of ruining almost everything.
Oh, and add on to that 15% tax that's been in place all the costs of complying with regulations for pot store owners plus any additional city taxes:
Hurting wallets further, some cities tack on an additional marijuana business tax - with some cities adding an additional 10%.
Oh, and then there's been the problem of how to deal with all the money that comes in, thanks to being kept from having accounts at banks. (Tack the price of a couple of armed guards on top of the already high pot prices.)
California failed to learn two very important lessons - both taught by sources liberals love to disparage.
One, the Laffer Curve clearly shows that, at a high rate, taxes discourage the taxed economic activity. As Colorado's experience shows, there is an optimal tax rate for legal marijuana.
Two, Walmart demonstrated that to take over an established market from existing participants, you must first price yourself below those participants. Once you've cleared them out, you can raise your rates to cover your costs. California should have kept taxes low enough to enable the legal dispensaries to be competitive with black market dealers, but they didn't and priced the legal dispensaries out of the market.
Conan the Grammarian at January 18, 2020 8:21 AM
This topic came up not too long ago. I said then that California was at that awkward stage of having taxed/regulated something to death, and having to subsidize it to keep it going.
First step towards subsidizing? notice how there is no "cuts" in taxes, or regulations.
As for the large bundles of cash they can't put in the bank, you can thank Obama's "Operation Choke Point". I suspect that it is sufficiently popular with the political class to survive. Because they can hit gun stores and manufacturers, as well as pot sellers, hookers and pron stars.
I R A Darth Aggie at January 18, 2020 9:03 AM
"Perhaps I'm wrong about this, but maybe people who are getting their pot illegally now have a system they're not going to ditch if legal pot costs come down a little."
After decades of funding a vast criminal enterprise costing countless lives, and cementing the practice of constant lying to family members and the public about drug use, why would it occur to those involved to quit?
You're right, and you're talking about a segment of the public that shouted, "Fuck you and the law, I want to get high."
Radwaste at January 18, 2020 9:07 AM
Shut up tranny
john jacob at January 18, 2020 2:00 PM
This doesn't look like it will matter. It is a step too small and too short. Note this is only for three years. Most successful businesses use at least a five year planning window. A three year tax reduction won't change anyone's investment plans. Especially not with only a 4% reduction in taxes.
Ben at January 18, 2020 4:53 PM
Just to be blatantly clear, Newsom is looking to cut $0.30 off of that $9 pill. Not exactly a game changer.
Ben at January 20, 2020 8:33 AM
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