How High Is Too High For Colorado Pot Tax?

COLORADO: After legalizing recreational marijuana last year, Colorado voters Tuesday are considering a tax on the drug.

The ballot measure represents the “politics of compromise,” said Rep. Jonathan Singer, the Democratic state legislator behind the tax proposal. The tax on marijuana must be high enough to generate revenue for enforcement but low enough to deter consumers from buying the drug on the black market, Singer said.

Voters are considering a 15% excise tax on marijuana producers to pay for school construction, and a 10% special sales tax on consumers to fund marijuana enforcement. In Colorado, any tax increase must get the voters’ approval. The taxes could generate an estimated $67 million annually after the first year.

If the measure passes, the state legislature has the option to raise the 10% special sales tax to as much as 15% in future years, according to the proposal. The excise tax is capped at 15%.

The legislature could also lower the excise and sale taxes if it appears the taxes are too high and marijuana users are still buying the drug illegally. The magic number for taxing the drug is still anyone’s guess.

“The number one truth is, we don’t know because no one’s done this before,” Singer said.


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