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Mayor: Marijuana Legalization

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Dołączył: 12 Lis 2020
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PostWysłany: Wto Lis 17, 2020 04:14    Temat postu: Mayor: Marijuana Legalization Odpowiedz z cytatem

Mayor: Marijuana Legalization (And Insanely High Taxes) Saved Chicago From COVID-19 Disaster

Cannabis buyers in Chicago, where legal marijuana sales began Jan. 1, pay some of the highest taxes in the United States.

And this expensive weed—and the nearly $1 billion in marijuana-tax revenue projected to flow into public coffers in Illinois this year—has helped Chicago Mayor Lori Lightfoot avoid laying off hundreds of workers, she said over the weekend.

The COVID-19 pandemic is wrecking municipal budgets along with personal bank accounts. Millions of Americans remain out of work or behind on rent. Cities that rely on sales taxes—from consumer goods, from restaurants, from tourism—to fix roads, fund schools, and pay cops and firefighters are also deeply in the red, with mayors and city councils mulling years of austerity in response.

In Chicago, Lightfoot proposed laying off 350 city workers as part of a package of cuts deemed necessary to close an estimated $2 billion budget deficit over the next two years.

But then Illinois recorded another $100 million in cannabis sales-tax revenue in October, pushing the yearly haul to $800 million through the first ten months of the year. That’s almost as much as Illinois rakes in via taxes on liquor.

With more cannabis money than previously expected, Lightfoot said Saturday that the layoffs can be avoided, as the Chicago Sun-Times reported.


For some cannabis-industry observers—and for both consumers and entrepreneurs foiled by the high cost of entry—Illinois isn’t a model to follow.

The state has strict licensing requirements—only existing medical-marijuana operators have been able to sell cannabis to the general public—that have led some entrepreneurs who cannot acquire licenses and are shut out of the industry to file a lawsuit.

And with total tax burdens exceeding 40 percent, cannabis buyers in Illinois pay what may be the second-highest taxes. With a local tax on top of state taxes, eighths (that is, 3.5 grams of cannabis flower) cost $75 and up at Chicago dispensaries.

High taxes in other states have driven customers to the illicit or “traditional” markets, according to multiple analyses.

And high taxes on consumer goods—regressive “sin” taxes—have allowed some lawmakers and elected officials to avoid some more difficult conversations about revenue-generating, such as raising property taxes or taxes on cash-flush companies.

This, in turn, has inspired politicians to treat cannabis legalization as a convenient ATM dispensing free money.

In New Jersey, where voters legalized recreational cannabis on Election Day and would pay some of the lowest taxes under current plans, state Assembly Speaker Craig Coughlin has called for extra taxes to be levied on pot, in the form of what he’s called “user fees.”

Lightfoot doesn’t have quite the same luxury. She recently floated raising property taxes, and some progressive city aldermen in Chicago have proposed imposing a specific tax on Amazon, as the online retailer’s revenue continues to soar during the pandemic.

But as cannabis continues to sell steadily throughout the COVID-19 pandemic, legalization is fulfilling at least one of its promises: it’s making the public sector money.

There’s a catch here. Both lawmakers and voters alike have demonstrated an appetite for taxing marijuana sales. And now that everyone’s broke, there’s incentive to tax weed even further.

Whether lawmakers will later strangle their golden goose in an attempt to squeeze ever more money out of legal weed remains an open question.
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