There’s an old joke about two people in a restaurant. One says, “The food here is terrible.” The other says, “Yeah, and such small portions!”
I thought about that when Michigan legalized recreational marijuana last week. The goal, at least partly, was to redirect the money going to (then) illegal drug dealers and put it to better public use through the government.
And how did we do this? By passing amongst the lowest tax rates on pot in the country. Dealers in Michigan will only have to shoulder a 10 percent excise tax — plus collect our normal 6 percent sales tax, which is what you pay if you buy a toaster at Best Buy.
By comparison, the state of Washington charges 37 percent sales tax on pot. Colorado takes a 15 percent sales tax and a 15 percent excise tax. Oregon, which doesn’t have a sales tax on anything else, slaps 17 percent on marijuana. California levies a 15 percent excise tax plus a product-tax rate on every flower and leaf.
And Michigan? We just voted in about the cheapest deal in America. Which means private marijuana enterprises can make more profit here than almost anywhere else.
As Cheech might say to Chong. “Whoa, dude. We did that?”
We did.
A roach of a deal
And, honestly, I’m not sure why. Remember, collecting the lowest taxes doesn’t mean you’ll get the lowest prices. Economics might suggest that, but greed is not subject to rules. After all, the state won’t be selling you your marijuana, private businesses will. They can charge what they want.
Meanwhile, Michigan’s acclaimed financial “windfall” to help our roads, schools and cities — which is where the money is earmarked — would be a whopping 10 percent excise tax. Ten percent? Our state and federal taxes on gasoline are higher than that.
And gas is essential.
Pot is not.
Now, I admit to torn emotions on the marijuana issue. As a medical treatment, I am all in favor of it. I have seen too many people — including one in my own family — benefit from medically prescribed pot to deal with serious cancer. I cannot deny its benefits. In some cases, the THC in marijuana is the only thing that provides pain relief without gulping prescription drugs. It is also an appetite stimulator, which can be vital to certain patients.
And I agree, our jails are too crowded with people serving sentences for less-than-heinous possession violations. It seems a waste of human capital.
On the other hand, for recreational use, I have a problem introducing a new way to damage ourselves. And you can cite whatever report you want, long-term use of THC, especially in the higher concentrations that are now available, will have effects on your health and your mental state.
I also worry tremendously about yet another way to irresponsibly get behind the wheel of a car. The deaths and injuries due to drunk driving are a national tragedy. And while driving while high will remain a crime, we just made it a lot easier to commit.
And for what? A pot of gold that, even by the estimates of a group pushing the legislation, might end up being $135 million a year for our state?
On a $57 billion budget?
In dope terms, that’s a roach.
Crazy law. And such low prices!
Now, it’s true, people my age have had a long strange trip with marijuana. As kids, it was a societal no-no, the kind of stuff used in basement parties or the back of music clubs. The ’60s saw more widespread use; dope was another way to turn on and drop out.
Then it was a “gateway” drug, more dangerous for what it led to than what it was. Then it was a “just say no” issue. Then it was a college institution, a reggae staple, part of the sports culture. Movies like “Pineapple Express” glorified it. Musicians like Willie Nelson and Snoop Dogg were beloved despite — or perhaps because of — how much they smoked.
Being baked, stoned, wasted, toasted, was part of the culture, and pretty soon, as states began to loosen their laws, pot was how you chose to look at it, a legal substance by the state, a federal crime by the nation.
So I guess it’s normal to feel torn. And maybe you are as well. But when Michigan became the first state in the Midwest to take this plunge, the point wasn’t to make things more profitable for the business than our citizens.
Ten percent, plus sales tax? That’s it?
What was behind that? Friends of mine in Colorado claim that when that state became the first to legalize recreational pot use (in 2012, along with Washington) they saw a noticeable influx of people who moved there just for that reason.
If that’s the case, given how far Colorado, Vermont and Massachusetts are from Michigan (those are the next closest states with legalized pot) were we worried we wouldn’t be competitive? Or did the forces that pushed this legislation somehow convince voters that a low tax rate would be good for us, when it was really better for them?
Let’s face it. Eventually, every state in the country will likely legalize pot. And they can tell you a hundred reasons why, but the biggest one, politically, is money: the money saved on law enforcement and incarceration, and the money it will bring in through taxes.
Given that, it sure looks like we rushed into these rates. The state legislature has the ability to change them, and in my view, it absolutely should. The people may have voted on the concept of legalizing marijuana, but they probably wouldn’t mind more money going to the roads and schools than the pockets of the pot business.
And if users complain that, “Hey, that’ll make my pot more expensive!”, well, I don’t think the idea was to become the Wal-Mart of the marijuana world.
Such a crazy law. And such low prices! Like the people in that restaurant joke, we have to wonder what we’re doing here. Unlike the joke, it may not prove all that funny.
Contact Mitch Albom: malbom@freepress.com. Check out his latest best-selling book, “The Next Person You Meet in Heaven,” available online and in bookstores nationwide. Download “The Sports Reporters” podcast each Monday and Friday on-demand through Apple Podcasts, Google Play, Spotify and more. Follow him on Twitter @mitchalbom.
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