FOR IMMEDIATE RELEASE
Thursday, January 4, 2018
On Thursday U.S. Attorney General Jeff Sessions issued a memo directing prosecutors to enforce federal laws against marijuana. The memo rescinded the Obama Administration’s policies that generally prevented enforcement in states where medical or recreational marijuana had been legalized.
Family Council President Jerry Cox released a statement saying, “We are pleased with the federal Justice Department’s decision to enforce our nation’s anti-drug laws. For too long, federal officials have turned a blind eye to so-called ‘medical’ and recreational marijuana in the U.S. That needs to change.”
Cox said he hopes federal prosecutors will help keep marijuana out of Arkansas. “Arkansas’ marijuana amendment gives a handful of businesses a monopoly on marijuana, and it lets practically anyone qualify to use marijuana if they want to. Marijuana is a blight on the community. Arkansas already has a bad enough drug problem as it is. We don’t need stores out here selling marijuana on Main Street. I hope today’s decision will help keep marijuana out of our communities.”
Cox said the memo from the U.S. Attorney General should not come as a surprise to anyone. “Federal law is perfectly clear when it says marijuana is illegal. There is no question about that. Even Arkansas’ medical marijuana amendment admits that marijuana is illegal under federal law. It shouldn’t come as a surprise to anyone that the federal government would want to enforce its own laws. If people want to legalize marijuana, then they ought to take that up with Congress.”
A week before Christmas, consultants for Arkansas’ Tax Reform and Relief Legislative Task Force released an interim report analyzing the state’s tax structures.
The report is some 180 pages long, and touches on everything from motor fuel taxes to K-12 education funding.
The report does not make any final recommendations about tax policies, but it does contain a few elements we find troubling.
#1. The Report Hints at Cutting Charitable Tax Exemptions
Under Arkansas law, sales to nonprofit hospitals, sanitariums, and nursing homes are exempt from state sales tax.
The report says exemptions like this one “significantly erode the state and local tax base.” In other words, the state’s consultants seem to think Arkansas might have a lot more tax revenue to work with if it started taxing sales to these charities.
The report refers to this exemption as a “prime candidate for review” by the Arkansas Legislature. It also highlights sales tax exemptions on churches and other nonprofits.
Charities and churches contribute at least $378 billion to the U.S. economy each year — and possibly much more than that, according to some estimates.
Many charities operate on budgets that are so tight they likely would have to shut their doors if they were taxed at the same rate as for-profit corporations. However, this report by the state’s consultants could lead some to conclude the State of Arkansas would somehow be better off if it taxed charitable organizations. That’s a dangerous conclusion.
#2. The Report Hints That Gambling Might Be a Good Source of Tax Revenue
The report notes that many states are turning to legalized sports betting as a source of tax revenue, and says,
While most excise taxes have shown little growth in recent years, the revenue from electronic games of skill [the casino games operated in Hot Springs and West Memphis] is a notable exception. Revenue generated by the tax shows a strong upward trend in recent years. Since 2012, revenues have more than doubled.
This hints that Arkansas might somehow reap more tax revenue if it legalized more gambling. However, no state has gambled and taxed its way to economic prosperity.
The Arkansas Lottery pulls hundreds of millions of dollars out of the state and local economy each year; casinos and other forms of gambling do the very same thing. As we noted a few years ago, poverty levels are above average in parts of Mississippi, Arkansas, and Oklahoma that have casinos.
What’s more, many experts will tell you the social and economic cost of gambling dwarfs any tax revenue the state might glean. The bottom line: Arkansas won’t improve its economy or its state budget by legalizing more gambling.
This report is not the final word on Arkansas’ tax policies. However, it could lead some to believe Arkansas might benefit by taxing charities and legalizing more gambling. Arkansans should think twice before venturing down that road.
In recent years several states — including Arkansas — have moved to legalize marijuana for one reason or another. However, in spite of these state laws, marijuana is still 100% illegal to grow, buy, sell, or use under federal law.
The Obama Administration opted several years ago not to prosecute people growing or using marijuana in compliance with state laws. As a result, states have been able to legalize “medical” and recreational marijuana with few repercussions, and marijuana businesses and users have not faced prosecution.
However, that may be about to change.
According to news reports, the federal Department of Justice is set to let prosecutors decide how aggressively to prosecute marijuana in states like California, Colorado, Arkansas, and elsewhere.
That means medical marijuana farms, stores, and users in Arkansas could face criminal prosecution, if our U.S. Attorneys decide to enforce the nation’s marijuana laws.
Family Council predicted this possibility back in 2012:
If and when [Obama Administration] Attorney General Eric Holder is succeeded by someone else, that Attorney General could direct the U.S. Attorneys to prosecute any and every person using marijuana, regardless of their circumstances. Why? Because under federal law it is blatantly illegal to grow, possess, transport, sell, or use marijuana for any reason. Period.
This is not something federal law is ambiguous or silent about. Congress has spelled out in black and white that marijuana is 100% illegal.
If people want to legalize marijuana, then they should take that up with Congress, and they should not be surprised to hear federal prosecutors might actually start following and enforcing federal law. It really is as simple as that.