Congress Eyes Pot Tax

In the second part of the first of the Star Wars trilogies, the Republic starts building an army out of clones. The soldiers are grown in a giant factory, and each and everyone of them, despite having all the relevant characteristics of a human being, is the property of the government.

We are a long way from such science fiction becoming reality – maybe it will never happen. But the idea that government can obtain its own slaves has a distant metaphoric relative in today’s politics.

It’s called addiction taxes, and it is catching on among tax-greedy legislators all over the country. An addiction tax is, plainly, simply and brutally, a way of raising permanent revenue for government from activities that are addictive to individual citizens. The tobacco tax is a classic example: government expects you to continue to smoke to it can get money for general fund spending (as was suggested in Louisiana recently) or for children’s health insurance.

The latter idea is not limited to politicians with a strange set of moral preferences. Sometimes physicians will endorse smoking for this very reason. In 2006 the idea of funding children’s health insurance with a tobacco tax won the endorsement of the American Association of Family Physicians. Apparently, these practitioners of medicine think it is healthy to smoke if the money you pay for the cigarettes help pay for a tax-funded entitlement program.

Another infamous addiction tax is on alcohol. In 2010 the Democrat candidate for governor in Maine proposed an increase in the state’s alcohol tax so that the state could increase spending on community colleges. In other words, this politician told parents around the state: “Drink more so your kid can get an education”. The message was not “We’ll cut taxes and encourage you to work harder so your kids can get an education”.  No, don’t work harder. Don’t save for your kids’ education.

Have another bottle of wine instead and government will take care of the rest.

And when you’ve had more alcohol than you can handle, why not get yourself down to the state run casino and blow the rest of your savings there? More and more states want more and more revenue from more and more gambling. Maryland is only one of many examples.

As if addiction taxes on tobacco, alcohol and gambling were not enough, there is a nationwide push for the legalization of marijuana – for tax purposes. Last year the issue was a hot topic in several states, from Massachusetts to Washington, and  according to the federal government now wants in on the action:

An effort is building in Congress to change U.S. marijuana laws, including moves to legalize the industrial production of hemp and establish a hefty federal pot tax. While passage this year could be a longshot, lawmakers from both parties have been quietly working on several bills, the first of which Democratic Reps. Earl Blumenauer of Oregon and Jared Polis of Colorado plan to introduce Tuesday, Blumenauer told The Associated Press.

As is well known by now, Colorado is already a pot state. The medical marijuana outlets in the city of Denver are selling pot for well over $70 million annually, and in the 2012 election voters chose to de facto legalize the drug statewide. Evidently, tax-hungry elected officials at the federal level have taken notice.

And there is a lot of money in this, according to the two good men from Colorado:

Blumenauer’s bill would create a federal marijuana excise tax of 50 percent on the “first sale” of marijuana — typically, from a grower to a processor or retailer. It also would tax pot producers or importers $1,000 annually and other marijuana businesses $500. His office said Monday it doesn’t yet have an estimate of how much the taxes might bring in. But a policy paper Blumenauer and Polis are releasing this week suggests, based on admittedly vague estimates, that a federal tax of $50 per ounce could raise $20 billion a year.

And what do they want to do with the money?

They call for directing the money to law enforcement, substance abuse treatment and the national debt.

There you have it, folks. Turn on, tune in and drop out, and you will be helping pay down the national debt. Never mind cutting spending, never mind downsizing the morbidly obese welfare state. No, kick back, have a few drinks and a joint and you will be fiscally responsible.

And, as reports, this federal pot tax is relatively close to becoming the law of the land:

Advocates who are working with the lawmakers acknowledge it could take years for any changes to get through Congress, but they’re encouraged by recent developments. Senate Minority Leader Mitch McConnell last week came out in support of efforts to legalize hemp in his home state of Kentucky, and U.S. Rep. Dana Rohrabacher, R-Calif., is expected to introduce legislation allowing states to set their own policy on marijuana.

I am sure the folks over at the Institute for Humane Studies are very excited about this. That supposedly libertarian outfit uses “regular” policy issues to lure people in to their seminars and other activities. Once they have a captive audience, they cleverly turn the discussion toward legalization of marijuana, which is the real reason for the IHS to exist.

It does not bother them or any other “libertarian” legalizers that the legalization is being driven by statists who want yet another tax base. On the contrary, the silence on this issue from, among others, the IHS is very telling, showing that they want legalization at any price. By tacitly endorsing pot taxes they are in fact contributing to the destruction of economic freedom just to give people the opportunity to smoke pot in peace.

And just when you thought the legalization issue could not get any more twisted, in from the left come the unions, wanting a slice of the hemp pie for themselves. From Reuters:

The medical marijuana shop next to a tattoo parlor on a busy street in Los Angeles looks much like hundreds of other pot dispensaries that dot the city. Except for one thing: On the glass door – under a green cross signaling that cannabis can be bought there for medical purposes – is a sticker for the United Food and Commercial Workers union (UFCW), the nation’s largest retail union. The dispensary, the Venice Beach Care Center, is one of three medical marijuana dispensaries in Los Angeles that are staffed by dues-paying union members. Another 49 in the city plan to enter into labor agreements with the UFCW, the union says. Together, the dispensaries are a symbol of the growing bond between the nascent medical marijuana industry and struggling labor unions. During the last few years, unions, led by the UFCW, have played an increasingly significant role in campaigns to allow medical marijuana, now legal in California, 17 other states and Washington, D.C. In the November elections, UFCW operatives also helped get-out-the-vote efforts in Colorado, where voters approved a measure that made possession of one ounce (28.3 grams) or less of the drug legal for anyone 21 and older.

Once spendoholic legislators and greedy unions have stuffed their pockets with money from legalized pot, what will they set their cross hairs on next? Prostitution?

Don’t frown. A conservative estimate says this is a $50-million-a-year industry in Nevada, and that is from only 25 brothels. Imagine the tax potential from a nationwide legalization. Assuming the same density of brothels as in Nevada, namely one per 100,000 residents, that would create 3,100 brothels across America. If they all have a turnover of $2 million per year, we are now looking at a $6.2 billion industry.

Hey, Congress – there’s a tax base for you to salivate over. You already want people to smoke cigarettes, become alcoholics, and now you are expanding your tax greed to include pot heads.

You have already shown that tax revenues trump moral preferences. So what’s stopping you?