The Trouble With Marijuana Taxation

I believe that all states will legalize marijuana in the next five years. There will be several proposals this year to legalize the stuff that made Cheech and Chong famous. Currently, 23 states and the District of Columbia have laws legalizing marijuana in some form. Most of them use the guise of medical necessity to allow their citizens to get high. The District of Columbia, Alaska, Oregon, Colorado, and Washington make no pretense — if you want to smoke a joint there, knock yourself out.

A reveler lights a joint to take part in a mass lighting ceremony to cap multiple days of festivities to mark the unofficial 4/20 marijuana holiday Monday, April 20, 2015, in Denver. The mass lighting was done at 4:20 p.m. to cap off the activities in Colorado. (AP Photo/David Zalubowski

Arizona will probably have a legalization measure on the ballot in November 2016. Cannabists say that taxes on marijuana will raise $72 million a year, and they would like to give $40 million of that to schools. Everybody would be a winner: People can listen to Bob Marley and wander glassy-eyed around the desert, while local schools receive badly needed money without having to raise taxes. Purveyors of snack foods will reap windfalls as hungry potheads flood the convenience stores.

When I was young, the country had a czar waging war on drugs. The federal government aired ads likening the brains of people who used drugs to fried eggs. Who would have thought we’d see widespread acceptance of marijuana legalization?

Marijuana should be legalized. Americans have been smoking pot for a hundred years. The prohibition has not and will not work. I wouldn’t recommend driving while high, but the societal effects of pot smoking are minimal. And don’t buy into the arguments that pot is a gateway drug to crack or that it will produce a nation of dimwitted underachievers. The leadership of this country, and the last three presidents, have gotten high. The major accomplishment of the drug laws has been the incarceration of a lot of nonviolent people.

That being said, the trend toward legalization is troubling on the tax policy front. Every proposal, like the one in Arizona, calls for dedicating marijuana tax revenue to schools, which is a terrible idea. Perhaps everyone will be stoned and won’t care, but aren’t schools important enough to pay for with real, broad-based taxes on income, sales, or property? It seems to me that the most important function of state and local governments is educating children. Why would we foist even a small amount of the cost onto a narrow segment of society? There is nothing just or principled about that.

We have seen this before with cigarette taxes. Many tobacco tax increases have passed because the revenue was going to schools. That is even worse than using marijuana taxes. In the end, both are inappropriate ways to pay for a fundamental government service. I used to joke that if I were a teacher whose raise depended on cigarette taxes, I would be leaving cartons of Lucky Strikes on every kid’s desk. My message would be “tell your parents it’s OK — all the cool kids are smoking again.” If my raise depended on marijuana taxes, I might encourage the kids to smoke joints the size of paper towel rolls.

So I’m torn. I don’t care what you smoke. I just hate the fact that we are going to ask those of you who do to pay for essential services received by all.

source: forbes.com by 

 

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