The city of Oakland proposes to tax “medical” marijuana sales at 5%, and frankly recreational sales at 10%. (This raises the question of who would pay the extra 5% tax rather than getting a “recommendation” from any of the doctors who cheerfully sell them to all comers.)
But Oakland’s pot entrepreneurs, suddenly sounding like the U.S. Chamber of Commerce, warn that if pot is taxed in Oakland buyers will move to places that don’t tax it, or don’t tax it as much.
They’re right, of course. It’s called “Tiebout competition.” Under the insane local-option plan in Proposition 19, no jurisdiction could successfully impose high cannabis taxes as long as some other jurisdiction had lower taxes. What you’d have is a race to the bottom, with very little revenue coming in.
The moral of the story: stoned logic is great for play-time, but less useful for making budget projections.