Why We Should Legalize and Tax Cannabis


Federal, state, and local governments are hurting for cash. Bad. It’s time for the government to turn dope into a revenue source instead of a black hole for funds needed elsewhere.

Legalize cannabis so we can tax it

Harvard economics professor Jeffrey Miron published an academic paper in 2005, titled “The Budgetary Implications of Marijuana Prohibition.” As part of this research, he studied the ongoing law enforcement costs of maintaining the marijuana prohibition, and also estimated the potential tax revenue. Here are the highlights for the US as a whole:

  • $7.7 billion could be saved every year in law enforcement expenditures
  • $6.2 billion would be gained in tax revenues if marijuana were taxed at rates comparable to tobacco and alcohol

That’s $13.9 billion that could be coming in instead of going out. Sure, it’s not going to be a panacea, but when you have a billion here, and a billion there—after a while it adds up.

Legalize cannabis so taxwe have more control over it

One unintended consequence of making something illegal is that it often enables more people to have access to it, not fewer. Young teens and pot are a classic example of this phenomenon. Because marijuana is a black market product, an entire underground distribution network has evolved. It begins with a Central American farmer, passes through a lot of scary guys who almost never check in with their parole officers, and ends with that really popular tenth-grader at your kids’ high school.

Alcohol, on the other hand, has an above-ground distribution network that is controlled every step of the way by government regulations. And selling it to minors could cost a retailer their license, so most make a point of not doing it. Because of this, it’s actually easier for young teens to get marijuana than it is for them to get alcohol. I’m guessing that’s not what our lawmakers intended.

Legalize cannabis to reduce crime

It sounds funny, doesn’t it? But this is actually one of the most serious points of this argument. Because if you ask the classic question question that helps untangle murky situations — “Who benefits?” — you’ll get a surprising answer.

Who benefits from the War on Drugs?

Commercial dope distributors.

Those are “drug lords” to you and me. For them, our huge investment in prohibiting this drug functions as a price support system. As the great free-market economist and Reagan-era thought leader Milton Friedman has pointed out, “There is no logical basis for the prohibition of marijuana.”* Making pot illegal drives up the price, which attracts more dope dealers, which makes the whole dope industry even bigger.

Since marijuana distribution is a dangerous business, ordinary people are not willing to do it. So this trade comes to be dominated by large gangs of criminals who have killed literally thousands of people in the course of doing business. The large amounts of money also bankroll these drug cartels and enable them to get hugely and profitably involved in all kinds of other illegal activities as well. We are, in effect, pumping a rolling2 river of steroids into the worst parts of our society. It’s hard to believe that this is what we mean to do.

What’s the opinion of law enforcement? You might be surprised to learn that there is a national organization of police, prosecutors, judges, FBI agents and corrections officials, called Law Enforcement Against Prohibition.** This organization recently released a report urging the legalization of many drugs are currently prohibited. As spokesperson Major Neill Franklin, a former Maryland State Police narcotics officer, says, “I’m a cop who knows the tragedies and violence associated with our current narcotics policies. We’ve got to wake up here and really do something about this.”

Legalize cannabis so all those stoners will have to do something useful

If someone wants to live in their Mom’s basement and get really, really good at Guitar Hero, then no one should deny them their piece of the American dream. But there’s no reason that the federal government should subsidize their next bowl by letting them have it tax-free. It’s time for the “wake ‘n’ bake” set to put their shoulders to the wheel and do their part for our country.

Ladies and gentlemen, let’s do the right thing. May God bless the United States of America with additional tax revenues in the years to come.


*Source: “Milton Friedman: Legalize It!” Quentin Hardy, Forbes.

**Source: “Law Enforcement Group Urges Legalized Drugs to Aid Economy,” Carolyn Pierce, The Baltimore Examiner.

©2010 Political Loudmouth


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