At 1/6/13 03:47 PM, Saen wrote:
At 1/6/13 02:38 AM, Light wrote:
Higher taxes on cigarettes and alcohol haven't "forced" people to buy those substances illegally.
If it's too heavily taxed, then people may acquire the drug through alternative methods.
With legalization, marijuana's costs go down. In Colorado, costs of the drug have dropped to less than a fourth of pre-legalization prices. This is mainly due to an increase of supply in the 'legal' market, also less fear and risk in the handling of the drug.
Let's say the government wants to get greedy and tax heavily, bringing the prices to black market levels during the time of pre-legalization, they will only be fueling the underground tax-free market of growing, co-ops, and bartering for the drug. If someone can legally grow 2 or 3 plants annually to get a year supply of weed, why would they pay several thousand dollars over the course of that year to buy it in a store? Also, why not grow several more plants and sell to a select group of friends below market price, all technically legal, and at the same time flipping the bird to the IRS?
The government has to weigh the pros/cons of the tax argument by deciding whether or not large revenues are worth having if the demand for the existence of a large black market continues due to the overprice.