What's The Best Way To Tax Marijuana? It Depends On What You Want To Accomplish: Raising Money Or People Smoking Less
Last year, Colorado voters legalized recreational marijuana, partly because backers promised that a tax on marijuana would help fund schools.
Colorado decided to use both kinds of taxes for marijuana: A 15 percent tax collected during production (that adds to the posted price the consumer sees), and a 10 percent sales tax (that doesn't show up until the moment of purchase).
Dan Pabon, a state representative who helped create Colorado's marijuana taxes, says lawmakers there talked about a lot of ways they could tax pot. In the end, they split the difference.
"We wanted to make sure marijuana paid for itself," he says.