3 ms·

If you can't understand the want for a world without government interference then a discussion in a thread isn't going to help.

Dylan16807 4y ago
I can understand that, now that you have clarified. Your first post wasn't clear whether you wanted the government out of the way, or whether you wanted the bans to stay as bans. Either way, I think your middle paragraph is very strange. When asking whether something should be taxed, why does it matter whether it was previously banned? I don't see how "create black markets only to prosper from them" makes sense as a complaint here. The theoretical tax money would be very similar if they had never banned the drug in the first place.
- chatterhead 4y ago
  To clarify: The misunderstanding lies in the reconciliation of pre-ban tax receipts and post-legalization tax-receipts and how they would be materially different if taxing is still taxing. 1) Black markets create higher prices. (increased risk = increased return) 2) Prices go up potential tax receipts go up. 3) Banning free market activity allows for the elimination of current competitive producers. (reduced supply increases price if demand holds steady) 4) Banning free market activity allows for later legalization of winners through licensing. (kickbacks) 5) Regulation through legalization creates government jobs which increases political power. Tax-it-to-have-it schemes benefit politicians and governments not people.
  - Dylan16807 4y ago
    But 1-4 reverse if they un-ban it. If you're that worried about the moral hazard of banning something to boost tax revenue, would a 5 year delay on taxes solve it? But it really doesn't look to me like "more taxes" was a motivator in the initial ban. 5 is real, but 5 would exist whether or not there was a ban. > Tax-it-to-have-it schemes benefit politicians and governments not people. But again that would be a problem even if there was never a ban at all? Should I just take your argument as being against tax schemes like this in general, whether or not there was a ban in the past?
    - chatterhead 4y ago
      1-4 do not "reverse" if legalized. The price for cannabis is still magnitudes higher than it was before legalization (we're going on what 15 years in Cali now). The ones who can produce are still decided by the government. If you want to pretend those things reverse so your argument seems sound you're welcome to do so. Doesn't make it true.
      - Dylan16807 4y ago
        A huge part of those ongoing prices is because it's only semi-legal and they can't do things like use banks. And part is a cost of regulation that would increase the price even without banning. If you remove both of those effects, I'm not sure you have much left.
        chatterhead 4y ago
        Consider the suppressed effect on demand; lower demand through banning means more stable prices. Even under medical/rec programs the prices aren't lower and if fully legalized with regulatory complexity the price would skyrocket as demand explodes and supplier constraints remain. Equilibrium will be reached based specifically on the actions of government to allow it to. Meaning, if government suppresses demand and limits supply through laws they stand to benefit the most from taxation. Just like anyone would with the same power in the free market as a middle man. Hence, the tax-it-to-have-it scheme has to move slowly or else the gray market that surfaces will do so specifically to undercut taxation and artificial government constraints. (Just like with pharmaceuticals and online markets)
        Dylan16807 4y ago
        > Meaning, if government suppresses demand and limits supply through laws they stand to benefit the most from taxation. Just like anyone would with the same power in the free market as a middle man. Yes, but that situation can happen without ever banning something. The problem is the way taxes and/or regulation can be set up, which I see as a separate issue.

Dylan16807 4y ago

I can understand that, now that you have clarified. Your first post wasn't clear whether you wanted the government out of the way, or whether you wanted the bans to stay as bans. Either way, I think your middle paragraph is very strange. When asking whether something should be taxed, why does it matter whether it was previously banned? I don't see how "create black markets only to prosper from them" makes sense as a complaint here. The theoretical tax money would be very similar if they had never banned the drug in the first place.

chatterhead 4y ago
To clarify: The misunderstanding lies in the reconciliation of pre-ban tax receipts and post-legalization tax-receipts and how they would be materially different if taxing is still taxing. 1) Black markets create higher prices. (increased risk = increased return) 2) Prices go up potential tax receipts go up. 3) Banning free market activity allows for the elimination of current competitive producers. (reduced supply increases price if demand holds steady) 4) Banning free market activity allows for later legalization of winners through licensing. (kickbacks) 5) Regulation through legalization creates government jobs which increases political power. Tax-it-to-have-it schemes benefit politicians and governments not people.
- Dylan16807 4y ago
  But 1-4 reverse if they un-ban it. If you're that worried about the moral hazard of banning something to boost tax revenue, would a 5 year delay on taxes solve it? But it really doesn't look to me like "more taxes" was a motivator in the initial ban. 5 is real, but 5 would exist whether or not there was a ban. > Tax-it-to-have-it schemes benefit politicians and governments not people. But again that would be a problem even if there was never a ban at all? Should I just take your argument as being against tax schemes like this in general, whether or not there was a ban in the past?
  - chatterhead 4y ago
    1-4 do not "reverse" if legalized. The price for cannabis is still magnitudes higher than it was before legalization (we're going on what 15 years in Cali now). The ones who can produce are still decided by the government. If you want to pretend those things reverse so your argument seems sound you're welcome to do so. Doesn't make it true.
    - Dylan16807 4y ago
      A huge part of those ongoing prices is because it's only semi-legal and they can't do things like use banks. And part is a cost of regulation that would increase the price even without banning. If you remove both of those effects, I'm not sure you have much left.
      - chatterhead 4y ago
        Consider the suppressed effect on demand; lower demand through banning means more stable prices. Even under medical/rec programs the prices aren't lower and if fully legalized with regulatory complexity the price would skyrocket as demand explodes and supplier constraints remain. Equilibrium will be reached based specifically on the actions of government to allow it to. Meaning, if government suppresses demand and limits supply through laws they stand to benefit the most from taxation. Just like anyone would with the same power in the free market as a middle man. Hence, the tax-it-to-have-it scheme has to move slowly or else the gray market that surfaces will do so specifically to undercut taxation and artificial government constraints. (Just like with pharmaceuticals and online markets)
        Dylan16807 4y ago
        > Meaning, if government suppresses demand and limits supply through laws they stand to benefit the most from taxation. Just like anyone would with the same power in the free market as a middle man. Yes, but that situation can happen without ever banning something. The problem is the way taxes and/or regulation can be set up, which I see as a separate issue.