(CO) pot tax a high or a low?

Jordan Smith, The Austin Chronicle: "It may be an off-year election, but voters are still high on pot measures. ... In Colorado, a handy 65% majority of voters approved a new tax on legal marijuana sales across the state. Colorado voters in November 2012 were among those to make history by approving a popular measure to legalize, tax and regulate marijuana cultivation and recreational use by adults."

Keith Wagstaff, The Week: "At first glance, this seems like bad news for stoners. Who wants to pay an additional 27.9% in taxes on something that ... was tax-free? Don't worry, thrifty smokers; you will probably end up with some extra cash in your wallet. That is because while black-market weed was untaxed, it came loaded with extra costs. Drug dealers don't just charge for their product. They charge you for the risk they take selling you the product, and the fact that you don't have many other options."

Pat Oglesby, The Huffington Post: "Taxing what you can't measure is nonsense. ... Other states thinking about legalization need to study the primitive example of Colorado's tax, and avoid the pitfall. The obvious answer is to forget price and adopt a surer tax base like weight or potency, following federal precedents for alcohol and tobacco. Or, if states want a price-based tax for some reason, they can delay measuring it until there's an actual arm's length sale to an unrelated party. But here's the clear lesson for future legalizing states: If you require or allow vertical integration, a wholesale tax on prices — when there is no actual sale — is crazy. It's the kind of tax whose only fans will be tax professionals, billing by the hour."

Jacob Sullum, Reason: "The upshot is that marijuana will be one of the most heavily taxed consumer products in Colorado, taxed at a much higher rate than alcohol even without taking local levies into account. ... With taxes that high, the state-licensed outlets may have trouble competing with the black market and with homegrown marijuana. (Colorodans are allowed to grow up to six plants at home and share the produce, 1 ounce at a time, 'without remuneration.') Legislators may find that if they set taxes too high, the result will be less revenue rather than more."

The Wall Street Journal, editorial: "The money is earmarked for education, so now parents can tell their kids they're getting high for their future, or something. The problem is that the tax rate, which can reach 35% in some localities, will be so high that it may encourage a black market, thus defeating the supposed purpose of legalization. This is what comes from toking up before economics class."

Tony Nitti, Forbes: "While it's tempting to view these taxes as a steep price to pay for what was previously a free — albeit illegal — recreational activity, there are two additional things to consider: First ... these taxes are necessary merely to cover the incremental increases to the state budget for the regulatory and public health demands of legalized marijuana. ... Second, the taxes slated to take effect in Colorado are actually considerably less than those imposed on users in the other state to have legalized the use of recreational marijuana: Washington. ... In both states, it will be fascinating to revisit the math one year from now, and determine just how profitable — or costly — it may be to legalize marijuana."

http://www.usatoday.com/story/opinion/2013/11/11/colorado-pot-tax-marijuana-legalization-column/3500635/