Taxing Pot? There's No Money in That

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Cash-strapped states are trying virtually anything to raise revenue for their ballooning deficits. And California, which earlier in the year contemplated introducing license plates with digital advertisements, may be at the forefront of devising new tax schemes.

In an incessantly-debated move, CA lawmakers have decided put the legalization of marijuana on November's ballot for voters to decide if the state will become the first to make using and growing pot legal. The theory behind the bill, Proposition 19, is that legalization could stymie the underground market and make pot transactions above-board and taxable, thus providing a critical revenue stream for the state. Not all policymakers agree with this optimistic sentiment. The directors of the Office of National Drug Control Policy, writing in the Los Angeles Times, outline exactly why this scheme won't work and how it might impose additional burdens on the state's floundering public services.

Why the Proposition Won't Raise Revenue

People don't typically grow their own tobacco or distill their own spirits, so consumers accept high taxes on them as retail products. Marijuana, though, is easy and cheap to cultivate, indoors or out, and Proposition 19 would allow individuals to grow as much as 25 square feet of marijuana for "personal consumption."
Why would people volunteer to pay high taxes on marijuana if it were legalized? The answer is that many would not, and the underground market, adapting to undercut any new taxes, would barely diminish at all.

How It Will Burden Police Officers

This proposition would burden them with new and complicated enforcement duties. The proposition would require officers to enforce laws against "ingesting or smoking marijuana while minors are present." Would this apply in a private home? And is a minor "present" if they are 15 feet away, or 20? Perhaps California law enforcement officers will be required to carry tape measures next to their handcuffs.
This article is from the archive of our partner The Wire.