False Promise of Tax Revenue from Pot

HealthZette ^ | 5/31/2016 | Kristen Fischer

[DenverCossack]

Dollar signs are flashing in the eyes of state lawmakers under pressure to legalize marijuana. In Arizona, the state has been told it could make $113 million if it legalizes recreational marijuana; in New Jersey, the financial promise behind a push for legalization is $300 million.

If all 50 states jump on this bandwagon, total revenues could be approximately $5.3 billion at a 15 percent tax rate, a Tax Foundation study found. That number could surge to $8 billion at a 25 percent tax rate.

More money may sound like a win for states. But some officials may be paying too much attention to the potential dollar signs — and not enough to the health and societal ramifications of making marijuana legally available.

“Legislators are being aggressively pressured by an army of lobbyists hired by the marijuana industry, which is motivated by increasing marijuana consumption,” said Henny Lasley, co-founder and project director for Smart Colorado, a nonprofit group aimed at protecting the health, safety, and well-being of children in the state. Lasley said legalization supporters claimed the model would eliminate the black market and generate revenues at the same time but that hasn’t been the case.

The state itself has emerged as a new black market, said Lasley. There are also reports of marijuana from Colorado being found internationally.

“The voters of Colorado were promised that the first $40 million annually of new tax revenue would go to our schools, and yet this annual number has not been achieved,” she said.

The revenue goals were not reached in the first two years and just $27 million has gone to schools, reports have found. A new video circulating — dubbed “How Marijuana Legalization Impacts Denver Public Schools” — aims to educate voters about how state excise taxes on marijuana are used.

[showme_the_Glory]

I bet the pizza, ice cream, and Doritos distributors love their little munchies increases.

[T-Bone Texan]

With the abdication of large segments of our society from any type of parental oversight and guidance, the lower orders absolutely DO need moral guidance.

The next generation of poor children will be the first to uniformly be raised without any guiding moral principles, as policy.

[dsrtsage]

Thing I don’t get is how everywhere before legalization there were posters and pamphlets everywhere extolling how awesome hemp was to make rope, or clothes or oil or any number of wonders. Yet after legalization in colorado, I have seen no measurable uptick in hemp rope, or clothing or oil manufacturing.

[Ken H]

With the abdication of large segments of our society from any type of parental oversight and guidance, the lower orders absolutely DO need moral guidance.

From the government?

[thoughtomator]

You can make your own alcoholic drinks too, but it’s a royal pain to do. I’d wager in a non-prohibition environment that’s how the weed situation would end up as well - a relatively small community of microcrafters and an industry that puts out high volumes of product at a wide range of quality and price.

[Brian Griffin]

“it’s up to us as parents to double down.”

Yup

“I don’t want to have to explain to my kids that yeah, smoking pot is bad, but that dude walking down the street with a doobie in his pie hole is not doing anything morally wrong because the govt says it’s OK.”

Kids, we have a crazy government run by leftist lunatics....

What did you expect for about $13,000/year for K-12 education per kid provided by the leftist nanny state, a quality education?

[shelterguy]

And tons of illegal dealers are moving in because they can hide in plain sight.

[AppyPappy]

Except that the government can regulate the legal marijuana operation to death like they did tobacco.

But if you just grow a little patch of Weed next to the cucumbers, you can pull some serious change on the black market and the government will think it is grown for personal use. If government weed is $400 an oz and black market is $200 an oz, you can make $100 an oz.
Not only that, the legal sellers have to lawyer up just like the tobacco companies.

[Brian Griffin]

“I don’t want to have to explain to my kids...”

All recreational drugs I know of have adverse impacts on people.

Your kids should know adverse impacts for tobacco, marijuana, cocaine, opiate, stimulant, alcohol and sugar usage by the age of 10 if you as a parent are doing a proper job.

Leftist governments are inherently immoral.

[Ken H]

And tons of illegal dealers are moving in because they can hide in plain sight.

That makes no sense. State grow operations are licensed and inspected. Illegal growers have to hide their operations as much in CO as elsewhere.

[Ken H]

People can legally grow their own in CO, up to 6 plants. Despite that, a billion dollars worth was sold in the legal market.

[corbe]

https://www.youtube.com/watch?v=IfsT_c-PZXg

Things to do in Denver when your Dead

Warren Zevon

[AppyPappy]

I’m guess that billion $ will creep downward.

6 plants? The War on Drugs continues.

[arthurus]

Are there any hard facts

[arthurus]

Ditto.

[Boogieman]

Well, in a mild climate you might get away with opening the windows and using a lot of fans. In Alaska, it would be too cold for that I think. We’re talking about tropical plants, so if the temperature drops too low, that is going to ruin them as well.

[CodeToad]

“In fact Denver Public Schools has recently had a large lay off and will be requesting HALF A BILLION dollars from tax payers this fall.”

DPS is a taxpayer ripoff that spends monies not on education but buildings for admin types and for special projects no related to education. They should be defunded for decades until the money they already squandered has been accounted for,

[IC Ken]

I know why the insurance companies worked so hard on DUI's. They get to double the insurance rate for 5 years if caught. How does this work with a THC conviction?

I know they say it is for the children but in Pennsylvania they DUI checkpoints start around 11:00 PM when the Children are in bed.

[DannyTN]

I suspect the tax money is a less than zero sum game for several reasons.

They say that Colorado is on pace to sell $1 billion worth of pot in 2016. Let's make the math easy and assume a 10% tax rate. That's $100 million in new taxes.

But where did that $1 billion come from?

• Some of it comes from people from out of state and will be a temporary net new tax revenue to Colorado until the other states lower their standards to Colorado's.
• Some of the in-state revenues, came from previously illegal pot sales. Those illegal sales weren't taxed. So that does represents a net new tax. And at the same time defunds illegal activity a definite plus.
• The rest of the in-state revenues is money that would have been spent on other items or that would have been saved. If it would have been spent on other items, then the new taxes have displaced the old taxes.
  • Now I supposed if people switched from smoking tobacco to pot, that money is no less productive than it would have been. But it is not new tax revenues. It's simply displaced tobacco sales taxes. And there may be more health issues with pot than tobacco, particularly mental illness.
  • If the money would have been spent on other entertainment pursuits, then again, the money wouldn't have been particularly productive. But the entertainment choices may be narrowing as there are fewer dollars chaising non-pot entertainment.
  • If the money would have been spent on long term assets such as land and buildings, or productive assets, equipment, education, investments, savings, etc, then wealth creation has been replaced by burning pot.

The real downside is the mental illness, by-polar and schizophrenia that pot use has been linked to. Colorado may find themselves with a future health and disability crisis. If so they will have burned their future up in pot.

[discostu]

In this case it’s just the usual government shell game. We’re dealing with this in AZ, the layers of government have learned that Americans would really like their schools to not suck, so they push various tax hikes and other things with the promise of “we’ll use the money for the schools”, so people approve. Then they don’t spend the money on the schools, because if they actually did spend the money on the schools the schools might stop sucking, and then how would they pass the next tax hike. AZ is currently in a massive legal battle because people finally got tired of that shell game and sued the government, which didn’t stop the legislature from pushing a bill (which unfortunately just got passed) to sell off the AZ trust land and give the money to the schools. Of course people didn’t notice the small section of that bill that says “oh and we can spend money earmarked for the schools on corrections and other stuff”, which not only means we’ll sell our trust land, but the schools won’t get that money, but it means if they lose the lawsuits on the previous bills they now get a pass.

CO has pulled in close to 6 times the amount promised for the schools in pot taxes. Now yes, some of that money is probably coming from other places (haven’t seen anything about other sin taxes but I’d agree with you some of those are probably making less than they used to), but I doubt it’s enough to give them a valid reason to have only put half the promised money into the school budgets. But they know if they properly fund the schools the next tax quest won’t be as easy a sell.