Berkeley Wants to Tax Your Drug Deals

It’s pretty straightforward. Mexican drug lords get it, Pfizer gets it, Pablo Escobar got it . . . until he got it. Even your average bartender has a good grasp of the situation: Americans pay loads of money for drugs. Control the drugs, make the money. Well, now the city of Berkeley is trying to get in on the action.

Berkeley’s got a bit of a problem -– actually, a $10 million one. That’s a projected shortfall for the city's budget. No, Berkeley officials aren’t going to start directly selling drugs to pay the bills. That’s a little too much like honest work. Instead, there is talk of amping up taxes on the legal sale of drugs inside the city limits. Namely, marijuana.

Hey, everyone’s doing it . . . in Oakland. Last July, Oakland implemented a 1.8% gross receipts tax on the sale of legit weed. It was the first tax of its kind in the country, and was passed by an overwhelming margin of 80%.

The racket in Berkeley would be slightly different. While he was inspired by Oakland, the architect of the idea, City Attorney Zack Cowan, opted for a square footage tax. It’s a tax that's harder to sidestep in California than a receipts tax, and he wants to make sure the revenue sticks around. What kind of revenue? To take one example, for the Berkeley Patients Group -- which is looking at a new 28,000 square foot space -- a tax of $10 a square foot would mean some serious dough.

Dispensaries clearly aren’t happy about it. Why should they be? No one likes paying to deal in drugs. (Our pharmaceutical companies are veritable magicians when tax time rolls around). If passed in November, the tax will also be bad news for all of those anxiety-ridden, insomniac day traders and sufferers of unexplainable, but persisting and otherwise untreatable, aches and pains. As dispensaries face higher taxes, consumers will face higher prices.

(Jokes aside, marijuana is an effective drug. Otherwise big Pharm companies wouldn’t be trying so hard to develop a synthetic version.)

We know national legalization and taxation of pot would make a bundle of cash. In the meantime, these initiatives show that elected officials are finally catching the drift: taxing drug “dealers” is more cost-effective than taxing residents to keep them in prison.

Photo Credit: Laurie Avocado