People aren’t buying because taxes are too high, AB-286 hopes to fix that
California’s high cash expectations from recreational marijuana are going up in smoke as most people are opting to buy their weed on the cheaper, more available and tax-free black market.
“We projected bringing in $185 million in taxes in (fiscal) 2018,” state Treasurer Fiona Ma said. “We got less than half of that.”
To give the legal market a boost, Ma is joining other lawmakers in supporting AB286 by Democratic Assemblyman Rob Bonta of Oakland to cut the current 15 percent excise tax on pot down to 11 percent. The bill would also suspend the tax of $143 per pound paid by growers for three years.
“Lowering a tax rate to bring in more money might sound counterintuitive, but as they found in Washington state, if you drop the tax, more people will buy more legally so revenue will go up,” Bonta said.
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