Fears of a 10 percent tax DrugWarRant / Pete Guither / 10,8,2010 Some of the stuff that comes out in the circus of the upcoming Prop 19 vote is just amazing. Scott Erickson writes in the Daily Caller: If pot is legalized, government will distort the market for it What many in the drug legalization crowd fail to recognize is that government, in its infinite wisdom, will ultimately distort this newly legitimate marketplace to such a degree that it will render the perceived benefits of its creation insignificant. In its zeal to capitalize on what it sees as a major new source of revenue, government will popularize marijuana use among the general public and, through overzealous taxation and regulation, fail to reduce the aforementioned black market and all of its attendant criminality. Case in point: California's Proposition 19, while not setting a uniform standard for taxation of marijuana across the state, will allow individual localities the leeway to set their own standards of taxation on the sale and cultivation of marijuana. If Proposition 19 and Measure C - a related measure linked to the passage of Prop 19 - pass, localities will be able to tax marijuana at rates upwards of ten percent. While Proposition 19 would make the possession and recreational use of marijuana legal in California, levying a ten percent tax on those selling it lawfully, coupled with a host of other fees related to its cultivation, will increase its cost to such a degree that many pot smokers will simply continue to buy their weed from sources unencumbered by the state's regulations, e.g. drug dealers. This does not bode well for the proposition that legalizing â€œharmlessâ€ drugs such as marijuana will lessen the prevalence of illicit drug dealers. Upwards of 10 percent? You're kidding. California's sales tax is 8.25%. 10 percent is nothing. At a 10 percent tax, there's no way that the black market could compete. Plus, the fact is, consumers prefer to purchase legally and are willing to pay quite a significant premium to do so. So localities would have quite a bit of leeway in adding taxes. Their biggest concern will be competition from other localities. If one town raises taxes too high, the neighboring town with lower cannabis taxes will benefit from greater sales.