Nicholas Sarwark: Vote against increasing taxes on marijuana in Colorado!

October 16, 2013

Libertarian Party of Colorado (LPCO) (source)

Vote 'No' on Proposition AA

Proposition AA is a massive tax increase that the voters should reject. When the Libertarian Party of Colorado endorsed Amendment 64 last year, many people objected that the party was also supporting a tax increase, since Amendment 64 allowed for a 15% excise tax on marijuana.

The good news is that Amendment 64 passed, making Colorado the first state in the country to re-legalize the use of recreational marijuana by adults. The other good news is that the voters can still reject the tax proposed by the legislature, and they should.

Proposition AA would approve a 15% excise tax on recreational marijuana, as well as a 10% special sales tax on sales of recreational marijuana in stores. The 15% tax would be applied at the wholesale level, while the 10% would be applied on retail sales (in addition to the 2.9% state sales tax already in place).

Proponents of the measure suggest that most of the revenues would go to fund public schools and that the special sales tax is needed to make sure there is enough money to fund regulations (and regulators) to police the recreational marijuana market.

Libertarians should vote No on Proposition AA because it would actually undercut the purpose of Amendment 64. First, medical marijuana is still legal in Colorado and would not be subject to the taxes under Proposition AA. This means that a person could walk into a store and buy the same product at a significantly lower price (without the 15% and 10% taxes) if he/she is buying it for medical purposes instead of recreational purposes. That arbitrary price difference will encourage fraud in applying for medical licenses as well as diversion of medical marijuana to recreational users by street dealers. One of the stated purposes of Amendment 64 was to eliminate street dealers; Proposition AA directly undercuts that.

Second, there is no evidence that the money collected by the state in normal 2.9% sales tax, application fees to open a marijuana business, and license fees to operate that business is insufficient to regulate the recreational marijuana business. In fact, what we’ve seen with medical marijuana is that the application and license fees were initially set too high, resulting in the state having a surplus in their budget. If the state actually runs short of money to regulate recreational marijuana, let them make the case to the voters at that point, instead of grabbing a huge revenue increase “just in case.”

Coloradans made history by supporting freedom at the polls last year in passing Amendment 64. They can make history again this year by rejecting an excessive tax on that freedom that would be used to create a bloated regulatory bureaucracy. Vote No on Proposition AA.

Nick Sarwark

 Vice Chair

Libertarian Party of Colorado

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