Shifting tax incidence: Evidence from the Washington State cannabis market

• 成果类型: Article; Early Access
• 署名作者: Hansen, Benjamin; Houghton, Kendall; Miller, Keaton; Weber, Caroline
• 署名单位: University of Oregon; University of Kentucky
• 刊物名称: JOURNAL OF POLICY ANALYSIS AND MANAGEMENT
• ISSN/ISSBN: 1520-6979
• DOI: 10.1002/pam.70041
• 发表日期: 2025
• 关键词: pass-through; taxation; SALIENCE

摘要

We study how prices respond when a 25% gross receipts tax remitted by cannabis manufacturers was eliminated in Washington state and the retail excise tax was simultaneously increased from 25% to 37%. Standard theory suggests that this change should have increased welfare for manufacturers, retailers, and consumers; instead, our analysis shows that the reform unexpectedly shifted benefits toward manufacturers at the expense of retailers and consumers, who faced higher tax-inclusive prices post-reform. We hypothesize that this outcome was driven by behavioral factors such as anchoring and loss aversion. Our findings add to a growing body of evidence that tax reforms can affect market outcomes in ways not predicted by standard economic models, offering a cautionary lesson for policymakers considering similar reforms.