Indopedia All Things Marijuana
Photo via 401(K) 2012
The GOP’s tax reform bill may be terrible news for the majority of Americans, but there could be a silver lining for the cannabis industry, according to political strategist Bradley Tusk. In a recent op-ed at CNBC, Tusk writes that the new bill’s elimination of the state and local tax deduction (SALT) may give states more incentive to legalize cannabis — and even other recreational drugs — in order to make up for the cut in revenue that this reform could likely bring.
The SALT deduction allows taxpayers to deduct the cost of state and local tax payments from their federal taxes. Experts project that eliminating this deducation will cause federal taxes for residents of high-tax (and predominately liberal) states like New York and New Jersey to increase by 7 or 8 percent. Tusk predicts that some residents, in order to avoid paying increased federal taxes, will move to states or cities with lower income taxes, or simply tighten their belts and spend less money. Both of these consequences would hurt local economies, as well as decrease local and state tax revenue.
Tusk describes the recent spread of legal gambling as a possible model for the…
