Feds Slap 70% Tax on Legal Marijuana Businesses

[hfojvt]

3. that does not look like 70% to me

it looks unsustainable.

If you cannot deduct expenses, then you are paying tax on gross income.

So in my business, selling books, I would buy a new book for $6 and sell it for $8. My net profit is only $2. But that does not include the cost of my building or utilities or employee salaries (not that I had any employees) and so on.

In the end, my own net income was less than zero. So I could not pay any taxes (except the sales taxes I collected) on my gross income.

I mean to be able to pay taxes on gross income, you would either need a tax rate that is low or a profit margin that is very high. If the tax rate is 30% to pay a 70% tax rate, you'd have to have a profit margin of 42%. I would expect there are hardly any businesses with that kind of profit margin.