New Report Projects $10-14 Billion Annual Savings and Revenues
Replacing marijuana
prohibition with a system of taxation and regulation similar
to that used for alcoholic beverages would produce combined
savings and tax revenues of between $10 billion and $14
billion per year, finds a June 2005 report by Dr. Jeffrey
Miron, visiting professor of economics at Harvard
University.
The report has been endorsed by more than 530 distinguished
economists, who have signed an open letter to President Bush
and other public officials calling for "an open and honest
debate about marijuana prohibition," adding, "We believe
such a debate will favor a regime in which marijuana is
legal but taxed and regulated like other goods."
Dr. Miron's paper, "The Budgetary Implications of Marijuana
Prohibition," concludes:
**Replacing marijuana prohibition with a system of legal
regulation would save approximately $7.7 billion in
government expenditures on prohibition enforcement -- $2.4
billion at the federal level and $5.3 billion at the state
and local levels.
**Revenue from taxation of marijuana sales would range
from $2.4 billion per year if marijuana were taxed like
ordinary consumer goods to $6.2 billion if it were taxed
like alcohol or tobacco.
These impacts are considerable, according to the Marijuana
Policy Project in Washington, D.C. For example, $14 billion
in annual combined annual savings and revenues would cover
the securing of all "loose nukes" in the former Soviet Union
(estimated by former Assistant Secretary of Defense Lawrence
Korb at $30 billion) in less than three years. Just one
year's savings would cover the full cost of anti-terrorism
port security measures required by the Maritime
Transportation Security Act of 2002. The Coast Guard has
estimated these costs, covering 3,150 port facilities and
9,200 vessels, at $7.3 billion total.
"As Milton Friedman and over 500 economists have now said,
it's time for a serious debate about whether marijuana
prohibition makes any sense," said Rob Kampia, executive
director of the Marijuana Policy Project in Washington, D.C.
"We know that prohibition hasn't kept marijuana away from
kids, since year after year 85% of high school seniors tell
government survey-takers that marijuana is 'easy to get.'
Conservatives, especially, are beginning to ask whether
we're getting our money's worth or simply throwing away
billions of tax dollars that might be used to protect
America from real threats like those unsecured Soviet-era
nukes."
With marijuana prohibition
costing the U.S. government billions of valuable tax dollars
annually.
The societal costs of propagandizing against marijuana and
marijuana law reform, funding anti-marijuana 'science',
interdicting marijuana, eradicating domestically grown
marijuana and industrial hemp, law enforcement, prosecuting
and incarcerating marijuana smokers costs U.S. taxpayers in
excess of $12 billion annually.
Of the many numerous arguments that can be advanced by law
reformers and advocacy groups like NORML, is the
self-evident truth that marijuana prohibition, an utterly
failed public policy, costs taxpayers too much and delivers
few discernible social benefits.
As President Jimmy Carter told Congress in 1977:
"Penalties against a drug should not be more damaging to an
individual than the use of the drug itself. Nowhere is this
more clear than in the laws against possession of marijuana
in private for personal use. The National Commission on
Marijuana and Abuse concluded years ago that marijuana use
should be decriminalized, and I believe it is time to
implement those basic recommendations.
Therefore, I support legislation amending federal law to
eliminate all Federal criminal penalties for the possession
of up to one ounce of marijuana."
Marijuana legalization offers an important advantage over
decriminalization in that it allows for legal distribution
and taxation of cannabis. In the absence of taxation, the
free market price of legal marijuana would be extremely low,
on the order of five to ten cents per joint. In terms of
intoxicating potential, a joint is equivalent to at least $1
or $2 worth of alcohol, the price at which cannabis is
currently sold in the Netherlands. The easiest way to hold
the price at this level under legalization would be by an
excise tax on commercial sales. An examination of the
external costs imposed by cannabis users on the rest of
society suggests that a "harmfulness tax" of $.50 - $1 per
joint is appropriate. It can be estimated that excise taxes
in this range would raise between $2.2 and $6.4 billion per
year. Altogether, legalization would save the taxpayers
around $8 - $16 billion, not counting the economic benefits
of hemp agriculture and other spinoff industries.
The National Drug Control
Budget for national and international law enforcement has
risen dramatically from 1991 to 2000, surging 68% in ten
years, from under $11 billion to nearly $18.5 billion. The
separate demand reduction allocation similarly swelled 61%
from $3.7 billion to nearly $6 billion. Nevertheless,
marijuana use among twelfth graders rose even more
dramatically, more than doubling between 1992 and 1997.
Clearly, there is no correlation between anti-drug spending,
both federal and private, and drug use.
In clear comparison, it is
obvious that the drug reform movement is badly overmatched
in a struggle of truly David and Goliath proportions. But
the girth and strength of the prohibitionists is nonetheless
hardly enough to keep teen drug use rates down, let alone
stable. It is clear that increases in funding have had no
discernable effect on use rates. And the current Ad campaign
of $1 billion over five years will have the same lack of
effect.
