All was fine with regulating and taxing marijuana … till you saw the tax rate

Legalize it, regulate and tax it! That has been the battle-cry of those interested in ending the prohibition of marijuana in the United States. Well, they asked for it and they are going to get it in Colorado, which is suggesting a 35 percent tax to cover the “cost of regulation”.

How do you think that’s going to go over with those who indulge in the ganja? From CBS Denver.

Colorado voters will be asked to approve two state taxes totaling 25 percent on all retail marijuana sales in the November election. They may be asked to approve an additional city tax for Denver.

Denver Mayor Michael Hancock wants to add an additional five to 10 percent city tax on top of that.

Hancock said the money is needed to pay the costs of regulating the drug.

The reason the government in Colorado was willing to legalize pot was not to placate all the voters who demanded legalization; there really are not that many of them who vote. The real reason was to collect additional tax revenue. As usual, follow the money. At that tax rate, the marijuana industry is certainly to be like the gasoline industry, where the government makes a lot more profit on a gallon of gas than the oil companies.

Remember, this is just the sales tax. Along with the collection of sales tax, the State of Colorado also has a 4.63 percent income tax (flat rate) for individuals or businesses. So you gotta figure – for dealers in Denver – at least 40 to 45 percent of the price will just be going towards state taxes and accounting fees for a small business involved in selling dope. Of course, there is the federal income tax too, so those dime bags could easily cost you $20 to $25 in the “safe” and regulated Colorado market, with much more than half going straight into government coffers.

How the heck is the state going to identify black market pot as compared to the registered, regulated and taxed stuff? This is not like liquor or beer packaged and sold in a retail store with a brand name label. Maybe they will require it be packaged like cigarettes with tax stamps on the box or something, but can’t you just reuse the same box and put the weed from your black market dealer in the box? You could make your own vodka and pour it into a Ketel One bottle or something, but the drug cartels and local dealers are not making and pushing vodka – yet – they are growing dope.

If they want to legalize weed fine, just legalize it. No tax other than maybe the standard sales tax at the point of purchase. Colorado has a 2.9 percent excise/sales tax on liquor so why not just tax it at that rate? Nope … it’s all about the cash man, and the government wants their cut. As noted in the quote above, the Denver mayor is claiming they need that 35 percent because of the cost to regulate. Well bud, you’re taxing booze at 2.9 percent and you seem to be able to regulate the alcohol industry just fine with it … what makes marijuana so damn hard to deal with?