Whether people are talking about legalizing marijuana (which I support, even though I’ve never touched the stuff) or opening the NFA registry, it seems that everyone says, “Legalize it, then tax it.”
Personally, I’m in the “legalize it” camp, but not so much in the “tax it” camp, particularly when it comes to “sin” taxes…which I wish didn’t exist. Taxes should serve a specific purpose: I pay taxes on gasoline, and that revenue goes to maintaining roads, streetlights, and other infrastructure. I’m fine with that.
How does an NFA or marijuana tax serve anyone?
If the law requires that NFA items be registered with the ATF, I understand that it will cost a little bit of money to process each registration, and I could understand a processing fee that would cover that cost. At most, that should cost around $50. It’s essentially data entry. A re-opening of the NFA full-auto registry may prompt a spike in registrations, but even if they collect a $50 fee per item, the ATF would likely still be covering their costs (government isn’t supposed to make money).
Similarly, subject marijuana to the same sales tax, if any, that other purchases get subjected to. Same thing with alcohol and cigarettes. If the taxes are prohibitively high, then nobody will bother with paying them, and will instead buy things on the black market.
I understand the whole “legalize it” mindset, and I can understand the “regulate it” mindset (so as to ensure that products like marijuana are not adulterated with harmful chemicals, see China) to some extent, but the “tax it” mindset? I just don’t see how that benefits anyone except those who collect the tax.
2 thoughts on “Legalized = Taxed?”
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Just speculating here; if marijuana is legalized, not just de-criminalized (they aren’t the same), then it will be farmed commercially for profit, and anything that is farmed commercially for profit is taxed, or should be. Think in terms of tobacco: sure, anyone who wants to forego taxes could raise their own tobacco, cure it, and make it into cigars, pipe tobacco or cigarettes, but for the majority who just want to grab a pack of smokes the commercial farm (taxed) is the convenient way to go.
Robert,
I agree that if marijuana is legalized, then it will be taxed as an ordinary commercial product and people can buy it at retail.
However, many of the “legalize it, tax it” people I hear seem to suggest that it should carry some sort of extra tax, like taxes on tobacco products. I have yet to hear them explain why those taxes should be implemented, or what benefit they would serve — they don’t have the same value as, say, fuel taxes. It seems like those taxes would just be used for general revenue.