Staging Marijuana Taxes

Here’s how to start low and go slow: Not just phase-ins of rates, but staged effective dates for each new excise tax or tax base, one by one—that’s the insight from the Hoover Institution’s Alvin Rabushka’s enormous Taxation in Colonial America, now discounted to under $30 in paperback.

RAND-Vermont put it this way:

“The simplest, least evadable revenue sources come first. Flat annual license fees are easy to collect: Authorities have to find the enterprise just once and do not have to measure anything. Import duties are easier to collect than excises: They require policing just the borders, not the entire territory. Capacity-based license fees (e.g., fees based on the size of a liquor still) require just a modicum of tax administration, perhaps annually. With progress, volume-based excises are collectible across the jurisdiction.  . . . Potency-based taxes for homogeneous materials, such as proofbased liquor taxes, mark the final step in the tax-base march of progress.”