Cannabis Sin Tax – Is it Fair, and Should it Continue?
In theory, sin taxes are supposed to be reserved for behaviors that should be avoided. But with the plant proven to be beneficial, should cannabis sin tax be lumped in with alcohol, tobacco, and gambling?
What Are Sin Taxes?
Before we dive into cannabis sin taxes, let’s define what sin taxes are in general. Sin taxes are excise taxes on products or activities that some people deem to be harmful to society and/ or the individual. What products and activities have sin taxes typically depends on the state. Typically, products like tobacco, alcohol, sugary foods, gambling, and pornography have sin taxes.
Sin tax is a topic that can be polarizing in general. The theory is that sin taxes are should discourage people from purchasing harmful things by making them cost more expensive. Should transactions involving “sins” have a tax that is more than other transactions? Is gambling, consuming alcohol, or using tobacco a sin? We aren’t going to get into that here because we can’t call it.
Cannabis Sin Taxes – Are They Fair?
The biggest difference between cannabis and alcohol, tobacco, and gambling is the fact that cannabis is medicinal. The plant is legal for medical purposes in over 30 states. Typically, cannabis sin taxes apply to recreational, not medicinal. However, many cannabis consumers are unable to obtain their medical cards. Even though these consumers could probably benefit from medical cannabis, they must purchase it “recreationally”. This is one of the many grey areas that exist within the current state of cannabis in the U.S.
Tax rates on cannabis vary from state to state. Washington State owned the title of the highest tax on adult-use cannabis, at 37%. It doesn’t take an economist to figure out that this is one of the reasons why the illicit market for cannabis simply will never go away.
Evolution or Entropy? Only Time Will Tell
It is also no surprise that people will try to purchase cannabis outside of their own home state, and then return home with it. This is even true if cannabis is legal in their state, because they are avoiding the high tax rates. Of course, everything in our industry is constantly changing and evolving – and cannabis sin taxes are certainly no different. Other industries like the vaping industry and online sports betting have recently been hit with sin taxes in many of their respective states.
Cannabis Sin Taxes – You Decide
Let’s make this abundantly clear – we aren’t investing or business advisors here at Loud News Net. Unless we specify otherwise, our goal is to deliver news and content. We always let you the reader be the judge. We always love to hear what you think. Are cannabis sin taxes fair, and should they continue? Should recreational cannabis purchases be lumped into the same category as booze, tobacco, and gambling? Will taxes evolve into something positive for states to improve for the public, or will they inevitably fall into the slow spiral of entropy?
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