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Pot Tax Pairing Brings Norquist in Line With Democrat

Anti-tax advocate Grover Norquist has found a sliver of common ground with one of the Democrats he routinely denounces: marijuana taxation.

Norquist, the president of Americans for Tax Reform, held a news conference today with Representative Earl Blumenauer of Oregon, who has introduced bills this year such as the End Big Oil Tax Subsidies Act of 2013.

Norquist and Blumenauer -- who appeared at a 2011 comedy contest -- want to change a 1982 federal law that prohibits marijuana businesses from deducting ordinary expenses such as wages and health-care premiums. That rule effectively imposes the corporate income tax on more than their profits.

“It is just lunacy in terms of what you force businesses to do,” said Blumenauer, who said he supports treating marijuana like alcohol, which is legal, subject to federal excise taxes and various state rules.

The tax law was written before medical marijuana dispensaries started opening across the country and before Colorado and Washington approved adult use of the drug.

Norquist said the tax code penalizes legal businesses, and that the “giggle factor” of talking about marijuana obscures a serious flaw in the law.

“The government ought not to be in the business of picking winners and losers in the tax code,” he said.

Asked for his thoughts on supporting this tax cut, Blumenauer said it “feels good.”

Norquist’s response: It’s “habit-forming.”

The bipartisan comity lasted only so long -- until Norquist made an offhand reference to “those guys who build those nasty windmills” that kill birds.

Blumenauer, an alternative-energy advocate standing behind his unlikely ally, rolled his eyes.

The bill is H.R. 2240.

To contact the reporter on this story: Richard Rubin in Washington at rrubin12@bloomberg.net

To contact the editor responsible for this story: Jodi Schneider at jschneider50@bloomberg.net

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