Canada’s government is proposing a plan to tax a gram of legal marijuana at $1.
According to a news report from the Canadian press, the public announcement took place within Ottawa Canada as one liberalist outlined a federal tax proposal for legalization within the marijuana industry. The liberalist is Bill Blair, former Toronto police chief and he’s also appointed as one of the leading authorities within Canada’s government.
What are the pros for putting a tax on legal pot?
Since the public announcement last week, there have been discussions of whether this is good or bad for the citizens of Canada. The tax revenues from each weed purchase will help put more money into education, research, enforcement, and other activities. Although this seems very promising to Canada’s government overall end goal, local states don’t seem to agree with the overall proposal.
What are the cons of taxation of legal pot?
States or provinces are in disagreement with the federal tax proposal as Canada’s government only wants to split half of the tax revenues. This seems illogical as there are more provinces than there is one government. Would they get less for the number of tax revenues within each province than the government?
In addition, the provinces will still have extra costs if cannabis becomes legal within Canada. This will make it harder for provinces to keep up with the cash flow. British Columbia Finance Minister Carole James outspoke his concerns on the matter:
“To look at a 50-50 split when we’re taking more of the share of responsibility here in B.C. just isn’t fair and certainly isn’t going to work for our province,” said James.
Estimates of Tax Revenues
The charge for each gram of weed is $8, but from the new proposal plan the taxes would spike it up. The initial $1 plus another $1.17 GST which results at $10.17.
It’s also predicted that the tax revenues when legalized weed becomes known, will reach $1 billion in one year.
Overall, it seems as though putting a tax on cannabis will ultimately either benefit or bring some drawbacks within Canada’s economy. However, the price is still underneath the black market price which is where it should stay. Otherwise, if taxes keep spiking in the near future for cannabis legalization than why legalize it at all?
Source: The 420 Times
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