The Half-Astrophysicist Blog

Fuzzy Math in Arizona…

I was reading the Arizona Daily Star last night and came across an article about taxing medical marijuana in Arizona.  Medical marijuana was narrowly approved by voters in November.  Due to the technical wording of the proposition, some politicians (from both parties, which shows that there are some taxes Republicans will get behind) are saying medical marijuana should be taxed even though prescription drugs are not.

But this blog isn’t about the politics of the issue so much as stupid math being used to justify the tax. From the article…

Horne (AZ attorney General) figures the levy could generate $40 million for the state, based on a Denver Post story on how much marijuana is sold through dispensaries in that community“.

Okay, nothing wrong with that. Just a statistical comparison, probably not a bad estimate overall.  But how much tax revenue do they expect from this $40 million in medical marijuana?  Let’s find out…

With that in mind, Rep. Steve Farley, D-Tucson, wants to go further. Much further. With some Republican support, he is proposing a 300 percent tax on marijuana sold at dispensaries.

Farley had no estimate on how much his proposal would bring in. But using Horne’s $40 million as a starting point, a 300 percent levy could produce $1.8 billion a year – far more than enough to erase the state’s projected $1.1 billion deficit for next year.”

What?  100% of $40 million is $40 million.  300% is three times that much or $120 million, not chump change but a far cry from the $1.8 billion per year!

Now to be fair, it’s not clear from the article where this number came from.  It specifically says Rep Farley didn’t know how much revenue would be generated by the tax and it’s not attributed to Horne either.  It could have been the reporter trying to do math.  Wherever it came from, it is amazingly wrong.  Being able to do basic math is important when we are having public policy debates and discussions. We are not going to be able to solve our problems simply by taxing medical marijuana. Think I will write a letter to the editor on this one.

January 28, 2011 - Posted by | Education

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