YOUR BUSINESS AUTHORITY
For better or worse, Missouri voters legalized the sale of recreational marijuana in November. The ballot initiative gave Missouri cities and counties the authority to establish a local 3% tax on the sale of recreational marijuana, subject to voter approval. This decision faces many Missouri voters in April.
When consumption of a product is known to impose an unusual cost on society, a tax like the one voters are considering can serve three purposes: It can reduce consumption of the good through higher prices, it can generate funds to be used to address the harm done by use of the product or it can simply be used to increase local tax revenue.
Those who oppose the tax may be generally critical of new taxes or worried by the effects of the price increases. Both concerns are valid. The first could be addressed by a plan whereby this tax replaces a more economically harmful one rather than simply adding to local coffers. Taxes will never go away, but we could demand more accountability in how and to what extent the government taxes us.
Those concerned about the effect of the tax on the price of marijuana should remember that the sale of alcohol and cigarettes also have a special tax that aims to mitigate the risks associated with their use. These taxes can provide extra support to law enforcement or health care providers who will have to deal with the inevitable negative consequences for consumers who now have easy access to the good.
Ultimately, the decision rests in the hands of voters, who should weigh the pros and cons of the tax relative to the circumstances of their own community and vote on what they deem best in April.
—Maria Rivero and David Stokes, Show-Me Institute
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