Donald Trump, Jr., has claimed that the attorney-client privilege allows him to dummy up before a Congressional committee concerning a meeting with Daddy because there was an attorney in the room at the time. Quite apart from being laughable on its face, there appears to be a more fundamental problem that Junior faces with respect to his assertion of attorney-client privilege. It seems that the attorney-client privilege may not be a bar to a Congressional inquiry in the same way that it is in the context of a judicial proceeding. See The Attorney-Client Privilege in Congressional Investigations. That is, even if the communication was a legitimate attorney-client communication, Junior could still be compelled to testify.
Highlights of California rules and regulations for the legal marijuana market.
California marijuana rules are heavy handed, but signal end of prohibition. A California marijuana prohibition that makes sense.California weed entrepreneurs will make $5.2b in 2018 with almost no banks to put it in. San Francisco report weighs health risks raised by legal pot. Rush of pot grows splits rural California before legal sales.
New Colorado cannabis rules go into effect January 1.
New Jersey poised to legalize cannabis but some urge caution. New Jersey legal marijuana may also mean car insurance gets high. 62% of New York want legal marijuana, poll shows. Candidates for Connecticut governor back legalizing and taxing marijuana. New Hampshire lawmaker: Let’s end the failed war on weed.
Marijuana legalization advocate rules out Democratic bid for Florida governor.
Will Canada plan to get high go up in smoke? Canada marijuana industry enters consolidation phase. Saskatchewan pot survey suggests legal weed be regulated similar to alcohol. Quebec unveils marijuana legalization plan.
- Truck passing truck on a road with one passing lane, with about a 1 mph speed difference.
- Pulling a tissue out of a tissue box, and having to dive in to get the next one.
- Emptying the second rack of a dishwasher (Caution: always empty the bottom one first!) and having to empty the water from the bottoms of teacups and dry them.
Ah, Ken Rhodes’ comment reminded me of the reason I often don’t answer my land line, since it’s very often a call from “Rachel from Card Services calling about your credit card account.”
California has message for new legal pot industry: Pay your taxes. California has approved legal pot, but black market growers thrive. Uncertainty reigns when it comes to what the legal recreational marijuana market will look like in California. San Francisco bans cannabis ads on its buses. San Diego marijuana growers plan to cluster near border.
New Jersey moves toward legalizing recreational pot, but pace uncertain. Legal weed in New Jersey: Are we ready? Not so fast on legalizing weed, says New Jersey senate leader of black caucus. The evidence says legal marijuana reduces opioid deaths but Chris Christie won’t believe it.
These three kings of cannabis are going into business together. Don’t expect feds to move on marijuana soon, panelists say. Entrepreneurs see opportunity addressing consumer demand for pesticide-free cannabis. Marijuana Policy Project overhauls leadership.
Plain covers, tobacco-style warnings among proposed Canada marijuana regulations. Legal pot is coming to Canada and these ex-cops can’t wait. Canada weed stocks come off high as challenges loom before legalization. Canada bill to legalize cannabis faces opposition. New Brunswick secures marijuana supply for when legalization takes effect.
Mel Tillis is dead at 85. He wasn’t as famous as the performers who made his songs into hits, and unless he was singing, he had a stutter. He mattered to me because of two things: he got up on stage and spoke despite the stutter, and he wrote “Ruby, Don’t Take Your Love to Town,” in 1967. Continue Reading…
Sessions tells Congress he will not violate Obama-era legal protections for pot.
Marijuana could be legal in New Jersey as soon as April. A snag for legal marijuana in New Jersey? New Assembly speaker won’t commit. Marijuana legalization would force tough choice for New Jersey towns. How the price of weed in New Jersey could plunge if it’s legalized.
Budweiser’s ex-marketing chief sees weed as the new craft beer. Steep taxes on recreational marijuana are a powerful incentive for states to legalize. Marijuana legalization likely to favor large companies. Marijuana’s female pioneers are being pushed aside in the legal weed boom.
Canada provinces split on plans for legal marijuana sales. Cities fight for legal marijuana revenue as Canada reveals minimum $1 per gram tax. Quebec calls for one-year delay on legal marijuana. Nova Scotia to release minimum age and retail model by year’s end. Private legal marijuana stores, online government sales planned for Alberta.
Wanted: New Massachusetts marijuana inspector.
California race to legal pot: A dispatch from the front lines. The California marijuana tax problem: Why prices could increase 70% in 2018. California treasurer wants the state to study a public bank option for pot businesses. California cities may tax destroyed cannabis crops.
There’s a buzz surrounding Constellation’s legal marijuana deal. How Big Alcohol learned to stop worrying and love marijuana. Marijuana companies weighing billboard advertising’s expense against the exposure. DEA finalizes quota of government-grown marijuana for 2018 research: 978 pounds. Pot legalization opponents are in a state of denial.
Haze around Canada legalized pot sales becomes clearer today. Ontario wants bigger cut of pot tax, expecting strong demand. Please don’t enjoy Ontario legal marijuana. Pot to be sold from private retail locations in Manitoba, supply handled by Liquor and Lotteries.
Maine governor vetoes voter-approved bill to legalize the sale of recreational marijuana. New Jersey likely to elect a governor determined to legalize marijuana. Here’s how much Virginia taxpayers are spending to jail marijuana users.
Confusion coming with California legal marijuana. California to tax pot as much as 45%. Can Los Angeles repair the damage done by the war on marijuana? Some Los Angeles pot growers, manufacturers may get legal grace period ahead of licensing.
States consider best ways to legalize recreational marijuana. Seeing the light on legalization at Rhode Island cannabis convention. Montana marijuana advocates say 2018 is the year they make it legal.
Canada government facing resistance from Senate over pot law. Ready or not, recreational marijuana use is coming to Canada. Angela Merkel may agree to legalize marijuana in Germany under coalition deal.
Majority of Republicans support marijuana legalization. Marijuana legalization is around the corner, says former Republican Party Chairman Michael Steele. Talk show host Hugh Hewitt lobbies Jeff Sessions to pursue federal marijuana crackdown. A former Blackrock executive is raising one of the biggest marijuana funds yet. Constellation breaks pot taboo, opens door for major brands.
Arizona recreational cannabis foe indicted in national opioid plot.
Up in smoke: Wildfires devastate California pot farmers, who must rebuild without banks or insurance. High taxes could drive up marijuana prices and bolster the black market in California. Confusion coming with California legal marijuana. Kern County, third largest in California, bans legal marijuana. With legal marijuana on its way, Palm Springs, California seeks to expand pot tax revenue.
What you need to know about Maine delayed pot law.
St. Louis marijuana bill throws Missouri legalization fight back into spotlight.
Legal marijuana sales keeping Colorado housing market blazing. Three men with three axes burglarize Seattle pot shop three times. Opponents of marijuana legalization warned of pot-laced Halloween candy. It never happened.
Rolling out Canada legal weed comes with a high price tag. Ontario municipalities will have say in government-run marijuana shop locations. British Columbia public survey on legalization ends in one week.
On Sunday, Paul Krugman highlighted this chart from the Institute on Taxation and Economic Policy:
The chart illustrates that, when compared to their income, the wealthy do not bear a disproportionate share of the U.S. tax burden. (The web portal to the report is here and the full report can be downloaded here.)
I suspect that if one were to look at the calculation of income after factoring out several significant tax loopholes, one would discover that the calculation of the relative tax burden borne by the wealthy is actually significantly lower than the chart would indicate.
First, let’s look at the case of two individuals, Manny and Mo, who each purchase X shares of Acme, Inc. for 100K. Ten years later, the X shares are worth $250K. Manny sells his shares and has to pay tax on $150K. That’s because his tax basis is $100K and he has to pay tax on the gain, the difference between $250K and $100K.
Mo, on the other hand, dies on the same day as Manny sells his shares and her heirs sell the shares on that day. Because of the basis adjustment rules of IRC § 1014, Mo’s heirs pay no tax on the sale, because their basis in the stock is adjusted to its fair market value on the date of Mo’s death. The chart misses this “economic income” because, on their returns, Mo’s heirs don’t list as an exclusion ntheir true economic gain, the delta between $100K and $250K. Rather, they merely report a sale of property for $250K that has a basis of $250K. Thus, their economic gain is not reported in the income statistics. However, the Congressional Research Service has estimated that IRC § 1014 causes a serious revenue loss, $32.4 Billion in 2015 with that 92.7% of that loss benefiting taxpayers in top fifth of income.
But, as they say on TV, that’s not all. Wait until you crank IRC § 754 into the equation.
Assume that Larry, Moe, and Curly form a partnership and purchase an apartment complex for $1M. Ten years later, when the adjusted basis for each of them in the partnership is down to roughly $222K ($666K collectively), Moe dies. However, by that time the fair market value of his interest in the partnership is $700K (that is one-third of the total value of the apartment complex’s then FMV of $2.1M). If the partnership makes an election under IRC §754, Moe’s heirs begin to get tax losses based upon his $700K FMV. In other words, the depreciation from the increased FMV will likely generate losses that can shelter other income that Moe’s heirs have.
But There’s More!
Assume that at some point, Larry, Curly, and Moe’s heirs want to cash in and sell the apartment complex, thus shifting their asset base from an asset that they have to have to actively manage, to something like, say, an interest in a mixed use retail and office project that will be actively managed by a third party . Of course, they don’t want to pay taxes. So, they make use of the deferral provisions of IRC § 1031. IRC § 1031 allows the deferral of income recognition for tax purposes when the proceeds are invested in “like-kind” property.
And, of course, when Larry and Curly pass on, their heirs get a stepped-up basis in the new project and, like Moe’s heirs before them, get to shelter ordinary income. In other words, IRC § 1031 can be used not only to defer taxation on the sale of assets but, in many cases, avoid it altogether. (As an aside, there may be an additional level of tax avoidance if, for instance, the apartment complex is in, say, Maryland, which subjects income to taxation, but the mixed use project is in Florida which has no state income tax. Then, even if Larry and Curly are alive when their interest is sold, they will have avoided Maryland state income tax.)
The point is that in none of the above cases is the true economic income reported as taxable income. Stated more simply, for the wealthy the “blue bars” in above chart understate their actual income, thus reducing their relative tax burden.