Tax revenue has historically been one of the arguments in favour of legalising marijuana. This column uses a change in Washington’s marijuana tax regime to explore how taxation affects industry and consumer behaviour. Gross receipts taxes encourage vertical as a form of tax avoidance and thus reduce expected revenue. The choice of what to tax (revenue versus weight) also has important implications for how the market evolves.
Manolis Galenianos, Nicola Persico, 08 June 2009
Drugs cause many social problems, but so does the drug war. This column suggests a novel solution that emphasises the risk of rip-offs in street sales – reducing the penalties applied to those who sell low-purity drugs. Leveraging moral hazard this way would effectively raise the wholesale price of drugs, undermining the drug market.
Most Read
Vox eBooks
Vox Talks
Events
-
17 - 18 August 2019 / Peking University, Beijing / Chinese University of Hong Kong – Tsinghua University Joint Research Center for Chinese Economy, the Institute for Emerging Market Studies at Hong Kong University of Science and Technology, the Guanghua School of Management at Peking University, the Stanford Center on Global Poverty and Development at Stanford University, the School of Economics and Management at Tsinghua University, BREAD, NBER and CEPR
-
19 - 20 August 2019 / Vienna, Palais Coburg / WU Research Institute for Capital Markets (ISK)
-
29 - 30 August 2019 / Galatina, Italy /
-
4 - 5 September 2019 / Roma Eventi, Congress Center, Pontificia Università Gregoriana Piazza della Pilotta, 4, Rome, Italy / European Center of Sustainable Development , CIT University
-
9 - 14 September 2019 / Guildford, Surrey, UK / The University of Surrey
