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Joe | Feb 25, 2013 | Comments 0
One of the main purposes of marijuana legalization is to bring marijuana into the open and away from the black market, thereby reducing profits for criminal cartels. But this will only happen if the legal market price of marijuana can beat the black market price, which it can easily, barring one thing: high taxes.
Taxes raise the price of a legal product, be it marijuana or anything else. If taxes are high enough to push the legal market price above the black market price, consumers begin to shift to the black market, or back to it, as the case may be.
This phenomenon is so well-known that even the mainstream media recognizes it. And it presents a dilemma for legalization advocates.
Proponents of legalization understand that healthy sales taxes are a great tool for furthering their cause. At a certain point, however, high taxes will encourage an illicit market. Where is the line? It’s difficult to know for sure, but if a 50% tax were enacted on the federal level, the marijuana industry in a state like Washington would face at least $ 1.92 in tax for every $ 1 of product sold. Whether this level of taxation is enough to encourage a black market is difficult to say.
Exact numbers are impossible to know since the size of the consumer base is hard to get a handle on due to marijuana’s federal illegality. But one thing is for sure: Cutting cartels out of the marijuana business will only be possible if taxes are kept low enough to keep the price of legal weed lower than that of black market weed.
While it’s true that some consumers will pay a higher price to get a legal product and avoid the hassle and danger of the black market, many will not. So keeping taxes as low as possible is an important aspect of marijuana legalization for advocates, especially since our elected officials are not known for reasonableness or a basic understanding of economics.
Square Enix said today that underperforming console games were largely to blame for a disappointing nine month period at the Japanese company.
The Sleeping Dogs and Hitman: Absolution publisher posted a loss of 5.7 billion yen (£39m / $ 61m) for the first three financial quarters ended December 31, 2012, compared to a profit of 5 billion yen (£34m / $ 54m) a year earlier.
That was despite an increase in sales of 7.4 per cent year-over-year to 102.8 billion yen (£702m / $ 1.1b).
Square said its losses were “primarily due to the increasingly difficult condition of the world-wide console game market, under which the group is struggling to achieve a fair expected return on its investment”. It also cited the “sluggish performance” of arcade game machines as another contributing factor to “unfavorable sales and earnings”.
Elsewhere in its financial report, Square said other gaming platforms such as PCs, smartphones and social networking services are “generating an acceptable profit”, the operation of Wii MMO Dragon Quest X is “showing steady progress” ahead of its upcoming rollout on Wii U, and the firm’s amusement facilities business is described as “stable”.
Looking ahead, Square forecast a net profit of 3.5 billion yen (£24m / $ 38m) for the 12 months ending March 31, 2013. If the guidance is accurate, the figure will represent a decline of 42.2 per cent year-over-year.
It said: “The company views the expansion of content and services that conform to emerging customer needs led by the fundamental change in the business environments, and the launch of full-scale commercial services for major MMO titles will establish its profit base, and is focusing all efforts on an earnings recovery from now on.”
DETROIT (Reuters) – The Quadski, a one-person all-terrain vehicle that doubles as a personal water craft, will be on sale in the United States next month for around $ 40,000.
New Zealand businessman Alan Gibbs, the 73-year-old founder of Gibbs Sports Amphibians, said he hopes the Quadski will be a stepping stone to selling full-size amphibious cars to the masses.
Powered by a BMW motorcycle engine that turns the wheels and also drives its waterjet propulsion, the Quadski’s backers say it is capable of 45 miles per hour (70 kmh) on both land and water, with just five seconds required to convert to each role.
The Quadski goes on sale next month in Florida and by the end of the year will also be available in Texas, the Great Lakes area, and the New York area, with California sales to follow next year. Gibbs wants to sell the Quadski around the world by 2014.
The price tag will keep sales volume low, Gibbs admitted to reporters at a press conference last Friday.
“Just like flat screen TVs and other things, the cost will go down,” said Gibbs, who added that Gibbs Sports Amphibians is targeting sales of 1,000 in its first year, produced at the company’s assembly plant in suburban Detroit.
Efforts to make mass-produced amphibious cars are not new but have not been wildly popular. The German-made Amphicar of the 1960s sold only 4,000, with modest performance both on land and the water.
The Quadski is not Gibbs Technologies’ first amphibious vehicle, but is the first to be sold commercially.
The best known venture so far is the larger Aquada, which was produced by Gibbs Technologies in Britain. The Aquada was a sports car on land and a water craft that was fast enough for Virgin Group founder Richard Branson to steer across the English Channel in record time for an amphibious vehicle in 2004.
But Gibbs Technologies was unable to sell any of the 40 Aquadas the company produced, because the maker of its engine went out of business, raising support issues, said Neil Jenkins, chairman of both parent company Gibbs Technologies and Gibbs Sports Amphibians.
And then there was the web of U.S. regulations, said Jenkins, which may still keep Gibbs from realizing his dream of producing a mid-sized amphibious road-legal car. When the Aquada was presented for approval by U.S. regulators, they did not know whether to consider it an on-road motor vehicle or a boat.
The solution, said Jenkins, would be to “find a new category of vehicle” that will allow for meeting both land and marine regulations.
“In retrospect, the engineering which we thought was going to be the hardest task of all has paled in significance compared to the regulatory task.”
(Reporting By Bernie Woodall; Editing by Tim Dobbyn)
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Trip Hawkins, the founder of Electronic Arts, thinks dedicated video game consoles will not remain mainstream for long. The industry figurehead, who also founded The 3DO Company and early mobile and social games developer Digital Chocolate, spoke with IGN about where he sees gaming going in the next few years.
“The console market is always going to be with us, because there’s always going to be a hardcore segment, a segment that likes innovation,” Hawkins said. “But it’s going to become a smaller market, and it’s going to be more like a hobby market.”
He used airplanes as an example: while many people use them to travel, only a small subset actually own and operate their own planes. He believes game consoles will soon be made for a similar niche market.
That being said, Hawkins believes video gaming itself will only grow in scope and relevance to people everywhere. He said players on two billion PCs, four billion mobile phones, and soon as many on tablets will be the new driving force for games at large.
“In the old days I’d go down to the basement to play Grand Theft Auto. But the Facebook gamer is able to play at work, at home, in a hotel on a PC. They can get access to a browser just about anywhere. People are thinking about convenience first.”