Oregon’s Marijuana Sales Tax Will Hurt Businesses and Consumers
After a three month sales tax “holiday,” recreational marijuana consumers in Oregon began paying a 25% sales tax on January 1, 2016. Yes, you read that correctly: 25 PERCENT.
For those of you who went to public school and didn’t bother augmenting your economics education any further, this means that the actual price of recreational marijuana in Oregon is increased by 25% before consumers can purchase it.
As you can imagine, this leads to several problems, all of which hurt consumers and businesses. Consumers are hurt by having to shell out 25% more money than they would otherwise have to, driving down the amount of money they have to spend on other things. Businesses are hurt by having to raise their prices 25% unless they want to pay the sales tax themselves, an option some have taken. Of course this 25% hit slams right into their bottom line, giving them less money to pay employees or reinvest in their business. Most businesses simply cannot afford to add this massive expense, so they pass on the cost to the consumer.
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