NPR has an interesting story about the interaction between Colorado’s tax revenue from legalized marijuana and its Taxpayer Bill of Rights (TABOR):
Colorado voters overwhelmingly supported state taxes on marijuana, and the state collected tens of millions of dollars in the first year of legalization. But in a strange twist, all those taxes raised from pot may have to be refunded because of a quirk in the state’s constitution. That means money earmarked for schools and drug prevention programs could be lost unless lawmakers agree on a solution.
Liberal supporters of legalization will worry that this conflict threatens to invalidate a key argument for legalization; conservative opponents will use the conflict to claim legalization was oversold.
But libertarian legalizers should not care much either way. The crucial arguments for legalization are increased freedom for marijuana users and decreased prohibition costs for everyone, not increased tax revenue.
So if Coloradans end up with legal marijuana and an income tax refund, that’s just fine.