Vote no on Proposition AA
First, a disclaimer: The stars will not fall from the sky if Proposition AA passes. Unlike Amendment 66, it has the virtue of being subject to comparatively easy legislative alteration.
Be that as it may, the taxes it calls for are high enough that they may encourage a black market for marijuana. The high taxes also appear to be a backdoor way for state lawmakers who disagreed with the people’s decision to legalize marijuana — and that is most of them — to strike back.
Proposition AA would impose a 15 percent state excise tax on wholesale marijuana transactions and a 10 percent sales tax on retail sales. That’s in addition to the existing state sales tax of 2.9 percent, any local sales taxes and any marijuana-specific taxes adopted by local governments.
The upshot is that in some towns the tax on marijuana — just recreational marijuana as opposed to medical marijuana — could approach 50 percent.
That clearly is high enough to encourage underground sales of the drug, which are problematic on several counts. Legal sales would at least be regulated and restricted to those older than 21.
Amendment 64, which was the vehicle for legalization, does call for the imposition of an excise tax, with the first $40 million in revenues each year to be dedicated to the Building Excellent Schools Today fund. The proposed 15 percent excise tax is the maximum permitted under the amendment until 2017, at which point, with voter approval, lawmakers may raise it.
The 10 percent sales tax, on the other hand, is neither authorized nor forbidden by the amendment. It was added under the rubric of being needed to pay for regulation of the budding marijuana industry.
At the end of the day, the taxes proposed under Prop AA are simply too high, particularly in the initial phases of legalization. Like it or not, the amendment will result in enough people growing marijuana that there will be more than enough to supply a robust black market if buyers perceive the prices for legal weed to be too high.
Because of that, Proposition AA deserves a no vote.
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