Pot taxes reveal strange bedfellows

Published 1:00 pm Saturday, November 9, 2013

After voters in the states of Colorado and Washington legalized the sale of marijuana in their states, the public debates there moved on next to the obvious conflicts between state laws legalizing pot sales and the prevailing federal laws that prohibit the sale of weed.

But U.S. Attorney General Eric Holder cleared that up rather quickly by loudly informing pot smokers, growers and dealers that the Obama administration was not willing to sue Colorado and Washington in their efforts to legalize and regulate the sale and use of recreational marijuana.

The marijuana laws in Colorado and Washington allow the recreational use of marijuana and require that the states set up a bureaucracy to license, regulate and tax those sales. That’s where the whole discussion gets downright amusing.

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Couple that with the fact that now the District of Columbia and 20 states — Alaska, Arizona, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington — all have legalized so-called “medical” marijuana and the tax-and-spend antics take on the paranoid intensity of a Cheech and Chong movie.

Colorado voters are considering Proposition AA.  If passed, legal recreational marijuana would be taxed twice: First, by way of a 15 percent tax on the wholesale price of retail marijuana — with the first $40 million earmarked for education. Second would be a retail 10 percent sales tax levy, in addition to the state’s existing 2.9 percent sales tax, with proceeds more broadly earmarked for marijuana regulation, public health and law enforcement.

Of the retail sales tax proceeds, 15 percent would go back to the cities and counties where the sales occur.

The Colorado pot tax debate is producing a really weird set of political bedfellows in that liberal stoners and no-new-taxes conservatives are finding agreement in opposition to what some are calling the largest tax increase in Colorado state history.

Marijuana users there are whining that they are being victimized by the proposed tax. Proponents of marijuana legalization there say the new tax will drive Colorado’s portion of the nation’s estimated $30 billion marijuana market back underground.

Mississippians will see many similarities here. First and foremost, the laughable promise that “sin” taxes will provide the funding foundation for public education. That didn’t happen when Mississippi legalized whiskey sales or when the state embraced casino gaming — and it won’t happen in Colorado or Washington with the legalization of marijuana.

Second, the attraction of strange bedfellows to arguments about state regulation and taxation of things like alcohol and gaming has always been present. In Mississippi, local option alcohol elections usually put the clergy and the bootleggers in political league with each other.

But more than anything else, the tax-and-toke public policy debates in Colorado point up the absolute lunacy of the decision of the Obama administration to recognize “state’s right” on marijuana and absolutely nothing else.

President Obama and Attorney General Holder see mischief in states trying to regulate ballot security through voter identification despite the fact that federal election law provides for it. But they see nothing wrong with allowing states to make their own laws regarding the sale of weed despite existing federal laws the clearly prohibit the sale of the stuff.

Of course, if the feds see Colorado enjoy any success in taxing marijuana, can federal marijuana taxes be far behind? Mississippi mastered that concept years ago with a black market tax on illegal whiskey sales.

Everything old, as they say, is new again.

(Sid Salter is a syndicated columnist. Contact him at 601-507-8004 or sidsalter@sidsalter.com)