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article imageU.S. lawmakers propose bill to decriminalize and tax marijuana

By Greta McClain     Feb 5, 2013 in Politics
Washington - Lawmakers are ready to propose legislation which would allow individual states to regulate marijuana without worrying about violating federal drug laws.
Rep. Earl Blumenauer (D-Oregon) and Rep. Jared Polis (D-Colorado) plan to introduce two bills to the U.S. House of Representatives that will remove marijuana enforcement from the Drug Enforcement Administration's jurisdiction, moving it to the jurisdiction of a renamed Bureau of Alcohol, Tobacco, Marijuana and Firearms. The move will essentially allow states to regulate marijuana in the same manner they regulate tobacco and alcohol. The proposed legislation would also impose a tax on marijuana similar to that currently imposed on alcohol and tobacco sales.
Polis will introduce the Ending Federal Marijuana Prohibition Act. If passed, the bill will:
1. Remove marijuana from the Controlled Substances Act;
2. Transfer the Drug Enforcement Administration’s authority to regulate marijuana to a newly renamed Bureau of Alcohol, Tobacco, Marijuana and Firearms, which will be tasked with regulating marijuana as it currently does alcohol;
3. Require marijuana producers to purchase a permit, as commercial alcohol producers do, of which the proceeds would offset the cost of federal oversight; and,
4. Ensure federal law distinguishes between individuals who grow marijuana for personal use and those involved in commercial sale and distribution.
Blumenauer's bill, known as the Marijuana Tax Equity Act of 2013, states:
"Slightly more than 106 million people live in a state or local jurisdiction that has decided that some aspect of marijuana use should be legally permitted. Eighteen states plus DC currently allow for medical marijuana and two states, Colorado and Washington, recently legalized the recreational use of small amounts of marijuana. It is time for Congress to end the federal prohibition on marijuana, remove it from the Controlled Substances Act, and create a tax and regulatory framework, similar to the frameworks in place for alcohol and tobacco."
Taxes on the growing, processing and selling of marijuana will be implemented in the following manner:
1. Imposes a 50 percent excise tax on the first sale of marijuana, from the producer to the next stage of production, usually the processor;
2. Similar to the rules within the alcohol and tobacco tax provisions, an occupational tax will be imposed on those operating in marijuana, with producers, importers and manufacturers facing an occupation tax of $1,000/a year and any other person engaged in the business facing an annual tax of $500/a year;
3. Civil penalties will be imposed for failure to comply with taxing duties. Criminal penalties will be assessed for intentional efforts to defraud the taxing authorities; and,
4. Requires the IRS to produce a study of the industry after two years, and every five years after that, and to issue recommendations to Congress to continue improving the administration of the tax.
The bills are aimed at not only eliminating the current legal limbo states such as Colorado and Washington face after legalizing the possession of less than one ounce of marijuana for recreational use, but many see it as a way to generate additional revenue for a federal government facing a growing national debt. Although neither Blumenauer or Polis can estimate for certain how much tax revenue would be generated, "vague estimates" shows that a federal tax of $50 per ounce would generate $20 billion dollars per year. Washington state officials estimate the new legal marijuana market could bring in as much as half a billion dollars in state taxes each year. The bills propose that the tax generated go towards additional funding for law enforcement, substance abuse treatment programs and the national debt.
When referring to the referendums passed in November in Washington and Colorado, Blumenauer told the Associated Press:
"Folks in Washington and my friends in Colorado really upset the apple cart. We're still arresting two-thirds of a million people for use of a substance that a majority feel should be legal. ... It's past time for us to step in and try to sort this stuff out."
Polis stated:
"We get the DEA out of banning marijuana federally and we allow states to choose if they want it to be legal or illegal. We don't want the whole industry and trade to be subject to who the president is and whatever their whims are in a given day."
A similar measure was introduced by Reps. Barney Frank of Massachusetts and Ron Paul of Texas in 2011, however the bill never made it to a vote. It is somewhat doubtful this measure will pass in the Republican held House, however some are believe the growing nationwide sentiment that marijuana should be legalized as may help the legislation. The revenue generated by the proposed legislation may also work in its favor.
Polis also points out that the legislation gives states more autonomy to individual states and less federal government interference, something many Republicans have been calling for. On Tuesday, he said:
"This legislation doesn't force any state to legalize marijuana. Congress should simply allow states to regulate marijuana as they see fit and stop wasting federal tax dollars on the failed drug war."
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