News » California’s Addiction to Taxes and Why Dispensaries Are the Latest Target

Voters in Los Angeles approved Measure M this week, joining San Diego as another major city in California that is specifically taxing medical marijuana. The vote proves two things: Californians are addicted to taxes and nobody seems to understand how this won’t fix anything.

The new tax amounts to a 5% sales tax over and above the normal county sales tax already collected on dispensary sales. Officially, it’s a $50 tax on every $1,000 in gross reimbursements the dispensaries take in. That’s a specific term that highlights the fact that dispensaries are not for profit (and not allowed to be in California), so their income is different than a normal businesses’ would be.

Therein lies the rub. I guarantee that if Californians attempted to pass a tax law that required the American Civil Liberties Union, the Kowanis Club, or some other charity to pay a percentage of their income into the government’s coffers, there would be a huge stink. In fact, the proposed law would probably never even make it to the ballot.

But since it’s a tax on marijuana, in most people’s minds, it’s OK. Even if the entities to be taxed are charities. They’re just “pot charities,” right? So screw ’em.

Without looking at legal aspects yet (we’ll do that in a minute), this is problematic on its face. The justification for the tax is to generate about $10 million per year to alleviate huge budget shortfalls in Los Angeles.

That justification is bogus all the way around. Budget shortfalls happen because income is not matching outlay. Most normal people, when faced with a shortfall in their household budget, eliminate some of their expenses in order to bring things back into alignment. Government, however, has no such point of view and instead works to get more income. When I say “work” I mean “imposing new burdens on the people,” not actually, like, getting a job or anything. If your household budget was $50 short this week, would you be allowed to go to your neighbors and impose a “Fix My Budget Tax” and threaten them with violence or jail if they don’t comply? I don’t think so.

This is how government’s operate and it’s at the core of the marijuana issue as a whole. Since government can do nothing without threatening violence (either directly or indirectly), anything the people ask the government to do is infringing on the rights of someone, somewhere – either by taking away a freedom or by taking their income to pay for something; most often it’s both.

Californian’s can’t seem to get this idea through their head. They’re intent on taxing everything and everybody and believe that their “good justifications” for doing so make it morally acceptable. This, folks, is the crux of the entire economic problem in the State of California. There, we have the nation’s highest tax rate on nearly all fronts, have one of the highest percentages of public employees and welfare receipients per capita in the nation, and some of the most business-killing laws in the country. Currently, Californians have one of the highest unemployment rates in the nation as well. Yet they seem to think that more taxes will fix those problems.

It’s time for Californians to wake up.

If the legal battles sure to come thanks to Measure M happen, maybe that will be the wake up call Californians need. Though I doubt it.

The taxes the measure imposes are illegal on two fronts: the charities dispensing marijuana are non-profits and thus tax-exempt (or should be); and medicines in California are not subject to tax (sales or any other) – remember, medical marijuana meets the criteria of “dispensed medicine” under California law.

On top of all that, the new tax singles out medical marijuana dispensaries over all other businesses and adds an extra tax burden on them. Because of the above two exemptions, this could be seen as discriminatory against medical marijuana patients and providers.

So any taxes collected today thanks to Measure M will likely end up being defaulted and returned (plus legal fees and whatever else) when the measure loses in court a year or two down the road.

It’s about time the citizens of California realized that taxing things doesn’t fix problems. Instead, maybe it’s time for Californians to start thinking about fiscal responsibility instead.

Author’s Note: I will deal a swift kick to the ass of the first moron who calls me a “conservative” or a “Republican” because of this article’s message. Were I either, in your mind, would I also be a proponent of medical marijuana or marijuana’s legalization? Time to stop sniffing the Demo-Repub glue and wake up.



[source Toke of the Town]

Tags: califronia, measure m, medical marijuana, MMJ, taxes