Politics

Pot bridges partisan divide as lawmakers, lobbyists come together to push for tax deductions

Photo of Alexis Levinson
Alexis Levinson
Political Reporter

WASHINGTON — There is nothing like pot to promote bipartisanship.

An unusual coalition of liberal Oregon Democrat Rep. Earl Blumenauer, conservative California Republican Rep. Dana Rohrabacher, and Grover Norquist, the president of Americans for Tax Reform, came together outside the Capitol on a sweltering Thursday afternoon to talk about marijuana.

Once upon a time, as Blumenauer tells it, “a drug dealer, creatively, was trying to deduct the cost of a yacht” on his tax returns. The result of the ensuing outrage was 280E, a provision in the federal tax code that prohibits people who sell controlled substances, like pot, to take tax deductions or credits for that business.

When the provision was written in 1982, it applied mostly to people dealing drugs illegally. But now, with Washington state and Colorado legalizing recreational marijuana, and several other states legalizing the use of the drug for medical purposes, it’s having detrimental effects on legitimate operations.

“This is not about a drug dealer and a yacht,” Blumenauer said. “This is about legal businesses.”

Blumenauer and Rohrbacher are pushing for Congress to get rid of 280E.

“It’s goofy,” Blumenauer said, calling the provision “perhaps the most insane” of some of the tax laws on the books “because it doesn’t allow legal businesses to operate like other legal businesses.”

Blumenauer said he thought this issue could help spur Congress along toward comprehensive tax reform.

“My argument to the [Ways and Means Committee] Chairman [Dave Camp] and frankly to [Senate Finance Committee] Chairman Baucus is that it would be nice to do a little momentum building and have people work together on things that are common sense and have bipartisan support, and this is a classic example of where I think there would be good bipartisan support, simple fix, and start people moving along this path,” Blumenauer said.

Rohrabacher said he was pleased with the show of bipartisanship.

“Let me just note that, Rep. Blumenauer and other Democrats are very pleased that several conservative Republicans have come over in favor … And I want you to know that Republicans are very happy that Mr. Blumenauer has come out for lower taxes,” he said.

“Feels good,” said Blumenauer.

“It’s habit-forming,” replied Norquist.

Jokes aside, the group insisted that this was a serious issue.

“Look, there’s always a slight giggle factor on an issue that deals with marijuana,” Norquist said. “That said, this is tax policy. This is real stuff. This is, like, important.”

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