Marijuana Tax Policy Makes Strange Bedfellows

It's  common to see Norquist, center, surrounded by Republicans, but on Thursday he teamed up with a liberal House member to talk about marijuana tax policy. (Tom Williams/CQ Roll Call)

When the wonky sides of marijuana and taxes come together, so, too, can some unlikely coalitions.

Grover Norquist, the president of the conservative tax policy group Americans for Tax Reform, joined liberal bicycle enthusiast Rep. Earl Blumenauer of Oregon and soft-spoken Republican Rep. Dana Rohrabacher of California outside the Capitol Thursday to call for "tax equity" for legal marijuana dispensaries.

"Look: There's always a slight giggle factor on an issue that deals with marijuana," said Norquist, who is better known for his no-tax-hike pledge than for his support of a marijuana policy overhaul. "That said, this is tax policy, guys. This is real stuff. This is, like, important."

The issue that has Norquist, Blumenauer and Rohrabacher so fired up is an obscure section of the tax code (Section 280E) that, in essence, forces legal marijuana sellers to pay taxes based on gross receipts rather than income, functionally forcing pot providers to pay roughly 80 percent taxes.

The improbability of the coalition wasn't lost on Blumenauer; he noted that he isn't often "sharing the stage" with Norquist — "unless it's a comedy performance."

When Rohrabacher took the mic, he made it clear his participation wasn't an endorsement of pot.

"This isn't about whether someone should be smoking marijuana," he said. "It is a freedom issue that we do not centralize all power in the federal government."

Rohrbacher said he was glad to see his Democratic friend Blumenauer supporting lower taxes.

Norquist made the case that Congress and the federal government are presenting an obstacle to new businesses by applying an outdated law — all in the name of being tough on drugs.

"Headlines make bad tax policy," he said.

Norquist also said this wasn't about endorsing marijuana, but about fairness in the tax code.

"Those guys who build those nasty windmills that kill birds and stuff, OK, they get to take a deduction," Norquist said with a wry smile as Blumenauer, a forceful proponent of wind energy, looked on with what-have-I-gotten-myself-into amazement.

"Point noted," Blumenauer said.