Marijuana taxes: The campaign's case in favor of Proposition AA
Opponents of Proposition AA, intended to set tax rates on recreational marijuana sales, have gotten a lot of attention for showy events like Monday's free-joint giveaway on Boulder's Pearl Street Mall. But polls earlier this year showed 77 percent of those surveyed support such taxes, and Joe Megyesy, communications director for the Committee for Responsible Regulation, the Yes on Prop AA campaign, remains confident most supporters will back them. Moreover, he disagrees with critics who think they're too high.
According to Megyesy, "Most experts and those of us on the campaign -- a diverse group that's been working on marijuana issues for a long time -- feel the rate is at a level that will allow marijuana to become legitimate and emerge from the black market."
Proposition AA -- see the text as it will appear on the November ballot below -- calls for an excise tax on recreational pot sales of 15 percent, as dictated in Amendment 64, which legalized adults 21 and over in Colorado to use and possess small amounts of cannabis. In addition, the measure sets a 10 percent sales tax that can be raised to 15 percent if necessary to cover costs of the program.
Critics such as Corry, whose invitation to Vice President Joe Biden to help hand out free weed earned censure from Megyesy, believe these rates are excessive, especially given that they'll be supplemented by standard state and local sales taxes that could push into the 30-40 percent range. He believes the same sales tax consumers pay on other products, and perhaps a special marijuana tax comparable to that placed on alcohol (less than 1 percent in most cases, he says), would not only be sufficient but fair.
An image from the Yes on Proposition AA Facebook page.
"I also worked as a lobbyist on implementation of Amendment 64 at the State Capitol," he says, "and we had a big discussion back in March and April of this year about what the rates should be. Since the first $40 million on the excise tax -- the tax on wholesale activities -- is earmarked for public-school construction, which was a key messaging point of Amendment 64, there was a concern among legislators that there wouldn't be any money left over for enforcement. That's where the notion of the additional sales tax came up.
"When they originally proposed the sales tax," he continues, "it was a lot higher than we're talking about now: 25 percent. And we were very concerned at that point that marijuana would never emerge from the black market, and there would be more and more black market activity, and further gray market activity, that would really hamper marijuana's ability to come out as a legitimate industry. We fought hard to get that tax rate lower than 25 percent, and even though some people wanted it lower than the 10-15 percent range, that was the compromise we were able to arrive at."
The No on Prop AA camp contends that even this amount will push marijuana consumers to eschew legitimate retail outlets for underground sellers, thereby crippling the fledgling industry. But Megyesy isn't buying it.
Continue for more about the Yes on Proposition AA campaign, including a video and the measure's text.