Proposition AA on Colorado’s Nov. 5 ballot would levy recreational marijuana with a 15% excise tax at the wholesale level and a 10% sales surtax (above the existing 2.9%) at the retail level. Unsure of how to vote on the measure, I surveyed three conservative members of the state House and Senate. The verbatim correspondence follows:
Andrews: Big time cognitive dissonance. I don’t think I have ever voted for a new tax or tax increase in my livelong days as a citizen or legislator.
But AA seems a natural consequence of the voters’ decision on Am-64 a year ago.
Coloradans in their wisdom want regulated, recreational marijuana. The governmental machinery for which has to be paid for.
Hence this referred sales & excise tax scheme. As Bill Buckley might have put it, who says BB must say AA.
Have I gone squishy? Become a RINO? Help, amigos–
Here are the three legislators’ replies. Two are a firm “no” and the third is leaning “no.” I now find myself leaning “no” as well
Legislator X: I voted “no” on the floor last session and in my kitchen yesterday. The sales pitch last year that “retail” marijuana would be good for school funding was insulting. What next, tax prostitution “for the children”? No, thanks. It will hurt if it doesn’t pass, but that pain will be self-inflicted by those who believed this pipe dream.
Legislator Y: I voted against it. The amendment that passed directed us to regulate recreational marijuanas (RMJ) like alcohol. AA and most of the bills that passed did not do that.
As I recall, the excise tax on alcohol is between 3 and 8 percent, mostly below 5%. This tax rate at nearly 30% is excessive and will incentivize people to stay in the medical marijuana pool as the cost of keeping one’s card current is less than $200 annually. Further, a group of users only need one person with a card as possession is now legalized. I doubt that RMJ users will want to pay $60 or more a month in taxes on their $50/week usage.
Anxious to see how this measure fares in conservative counties. Everyone is wrestling with this just like you! Do I hate taxes or marijuana more?!?!
Legislator Z: During the session, I did my own “back-of-the-envelope” decision analysis of how this might play out. I assumed that there were four main interest groups. Each had conflicting motivations. I won’t go into all the details, but here’s a very basic summary:
Socialist Democrats: Will support in order to score more tax money and votes from the pot heads. Never let an opportunity pass to raise more taxes, skim off more unnecessary money for education, and HOPEFULLY make K-12 education dependent on even more drug money. (You know that they would CRINGE at the thought of actually having to enforce this out of EXISTING resources if they can earmark NEW taxes for their political allies.)
Pot heads/Libertarian pot heads/hippies/Dead Heads: Will oppose, because they don’t want to pay more and want to expand their Constitutional rights to free dope, Dude. The false impression that they will be too stoned to show up to vote was put to rest during the last election, but now that 64 was passed, they probably don’t care about more taxes to fund more PE teachers for the kids.
Colorado Drug Cartel/smugglers/distributors/Mafia: Will oppose, because they don’t want to pay any taxes, follow any regulations, and eventually want to corner the national and international drug markets, interstate distribution networks, and (as are always related to drugs) the money-laundering, human trafficking, prostitution, and international gun trade with Columbia (etc.).
Christians: Will support because they want confiscatory taxes to “tax the program to death,” in the name of traditional morality and the rule of law. That makes them strange bedfellows with the Big Government, Big Teacher Union Democrats. Unfortunately, those taxes will only apply to the ethical and law-abiding “legitimate businesses” among the Colorado Drug Cartel. All others will cheat, form front organizations, attempt to continue to conduct all sales in cash, and drive black market sales that will probably make Prohibition crime seem tame. Good luck with that.
The bottom line is that this is probably a lose-lose situation for the state, as well as Republican Principles HOWEVER it turns out. I agree with Greg that there will be a lot of creative ways to avoid the taxation and regulatory regime, avoid enforcement, and proliferate marijuana and (eventually) other drugs as the new normal. (This will not just stop at marijuana.) Mayor Hancock is already violating the law by allowing public use in Denver because he wants to avoid antagonizing his pot head Democrat base.
I can’t STRONGLY favor either passage or opposition because both outcomes could be equally bad. Personally, I am leaning toward voting no. If we have to fund the regulatory stuff, we currently have about $1.3 Billion in the state ed fund to fall back on.