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

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.
-Which of the following is not one of the concerns of some policymakers and economists that the increase in the share of income earned by the 1 percent is damaging to the country?

A) The higher incomes of the 1 percent may give them disproportionate political influence through campaign contributions.
B) Countries with high levels of income inequality have lower growth rates than do countries with more equal distributions of income.
C) further increases in marginal tax rates may reduce work, saving, and investment, thereby reducing economic growth.
D) Rising income inequality can lead to political unrest.