COLORADO: Remember when marijuana activists argued that legalized pot could help control budget deficits by reducing police costs and raising tax revenues? Putting that into practice in Denver has proven a bit difficult. Advocates for legalization are now balking at a 5% tax on marijuana purchases, possibly going to 10% to match the state’s taxes on cigarettes.
The state has a referendum coming in November that would impose a significant tax on marijuana purchases — 15% excise tax, and a 10% sales tax — to which the city tax would be added. That’s a big hit, er, large tax bite for recreational marijuana users. On the other hand, it’s about what cigarette smokers end up paying for their fix, too. Marijuana users might complain that tobacco has more health impact than marijuana, but that’s not going to be a terribly effective argument coming just after Colorado legalized pot for recreational use, nor is it necessarily supported by science.
Both habits are similar in terms of environmental impact, and with any kind of taxation, in terms of enforcement. That’s why the argument that legalization would eliminate the waste of police resources was always nuanced. Cigarettes have always been legal, but significant trafficking of untaxed cigarettes plagues law enforcement in most states with vice taxes, especially those adjacent to low-tax states (like Minnesota). Taxation is even more necessary for marijuana in order to pay for the extra cost of dealing with intoxication, which cigarettes don’t generate.