Here’s California’s broken grasp of economics in a nutshell for you: Top lawmakers and government-subsidized and unionized child care workers are arguing that marijuana taxes have to stay extremely high. Lowering them will harm “thousands of children living in poverty and children of color across our state,” state Senate President Pro Tempore Toni Atkins (D–San Diego) and Assembly Speaker Anthony Rendon (D–Los Angeles) wrote in a letter to Democratic Gov. Gavin Newsom.
California’s high marijuana tax rates and limited availability have made legal recreational sale a nightmare. The state collected $3.12 Billion in tax revenue from marijuana sales between January 2018 and November 2021. It may seem like a huge amount but market experts have noted that almost two-thirds (or $8 billion) of marijuana sales take place through unlicensed dealers. California still has a strong black market, even though marijuana legalization was passed.
To encourage legal marijuana retail, the cannabis industry needs tax relief. The state’s excise taxes, which are by law linked to inflation rates, is a major concern for growers. This means that taxes on marijuana went up automatically in January due to the huge inflation rate we have been experiencing nationally.
California’s government relies on sales tax revenues to fund a variety of programs including child care state-subsidized. In a strange situation, the state now has government officials insisting that taxes that fuel crime and drive up retail prices must stay there to benefit poor minorities. This is even while they launch a new war with weed.
It is absurd and backward. The negative effects of sales taxes trickle down on to very poor families, which Atkins and Rendon say they represent. California’s richest white people are not the ones buying and selling marijuana on black markets.
These people don’t represent the children and their families. These people are not the ones behind the push, they’re the beneficiaries of the state’s spending. Child care service organisations fuel this whole effort. Advocates for children’s programs held a press conference on Wednesday in Sacramento to stop lawmakers considering tax cuts to incentivize legal buyers to go up and lower retail prices.
NBC published this quote.
Marianna Hernandez is a Prevention Manager at Community Coalition. This advocacy and social justice organization is based in South Los Angeles. She said that cutting services would be an insult to people who are disproportionately affected from the war on drugs.
She stated that South L.A. used to be overcriminalized in the past for its cannabis possession, sale, or use. To now remove the community from the tax revenue is, quite frankly an insult to South L.A. Black or brown residents. Many of these families still have marijuana-related convictions.
Hernandez may be upset by the imprisonment of minorities from poor countries. But why is she supporting a tax system which encourages illegal sales, and more police enforcement on those illegal activities? Los Angeles Police raided Sylmar’s marijuana growing facility in November. Eight people were arrested. You can also see the Latino names and Asian names that were used to identify those who were arrested during this raid in San Bernardino County last November.
In reality, the money the state is spending on the children is going not to them but to the institutions that are meant to support the kids. Newsom last summer signed a collective bargaining deal to provide financial support for 40,000 child-care workers. For child care, $400 million was set aside in the state budget for fiscal 2021-22. This is why these individuals have an interest in keeping taxes high. Even if this means that black and brown citizens end up getting arrested.
People who are dependent financially on the state subsidy can use this tactic to argue that high and regressive cannabis taxes benefit poor minorities. These communities remain trapped in the cannabis black market due to this system.