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Article Summary In 2012, Colorado and Washington Legalized Marijuana for Recreational Use

question 66

Multiple Choice

Article Summary
In 2012, Colorado and Washington legalized marijuana for recreational use, and one of the major selling points in each state's pro-marijuana campaign was the possibility of generating millions of dollars in tax revenue from sales which could be used for funding general education. The Colorado legislature was weighing a proposal to tax marijuana at 30 percent, of which 15 percent would be a sales tax on consumers and 15 percent an excise tax on growers. Washington has set a tax rate of 44 percent on consumers and 25 percent each for growers and retailers. Since the legalization of marijuana is relatively new, projecting the economic impact of its sale is difficult, leading to many questions as to the quantities that will be produced and sold and what actual tax revenues will be generated.
Source: Elizabeth Dwoskin, "Colorado and Washington Try to Figure Out How to Tax Marijuana," Bloomberg Businessweek, April 26, 2013.
-Refer to the Article Summary. Colorado is weighing a proposal to tax marijuana at 30 percent, of which 15 percent would be a sales tax on consumers and 15 percent would be an excise tax on growers. Suppose the actual burden of the tax falls 80 percent on consumers and 20 percent on producers. In this case, consumers will actually bear the tax burden of ________ percent of the selling price and producers will actually bear the tax burden of ________ percent of the selling price.

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Recognize innovative activities undertaken by various groups to contain healthcare costs.

Definitions:

Market For Milk

A specific commodity market involving the buying and selling of milk, influenced by supply and demand dynamics, production costs, and regulatory factors.

Variable Ratio Schedules

A reinforcement schedule in operant conditioning where a response is reinforced after an unpredictable number of responses, leading to high and steady response rates.

Reinforcement Theory

A behavioral theory proposing that behavior is a function of its consequences, with behaviors being encouraged or discouraged through positive or negative reinforcement.

Behavior

The actions or reactions of a person or animal in response to external or internal stimuli.