Big news today when it was announced that California might be considering legalizing marijuana to raise over $1 billion in badly needed tax revenue. A Reuters Blog article by James Saft offers a fairly nice take on the announcement some excerpts are below.
…Want to help fund the bank bailout, ease California’s budget crisis and shore up strained U.S. finances? Legalize drugs, tax the trade and save on interdiction, domestic enforcement and the prison and court system….
…After all, it certainly helped Franklin Delano Roosevelt, who legalized alcohol in 1933 in the midst of the Depression and after more than a decade of prohibition, thus bringing a half a billion in 1933 dollars into public coffers in the form of tax revenue. By 1936, alcohol taxes were 13 percent of Federal revenue….
…California Governor Arnold Schwarzenegger has a similar opportunity. He is facing a $42 billion budget deficit, his prisons are filled to bursting, in substantial part with people in on drug-related crime, and he will soon be forced by judicial edict to start freeing people. He also has an offer from a group call Let Us Pay Taxes, which claims to represent the marijuana industry and is willing to pay $1 billion annually in taxes if only he will legalize. No doubt they are low-balling.
The U.N. estimates the value of the U.S. cannabis market at $64 billion annually, while a paper by academics Jonathan Caulkins and Peter Renter calculates that about half of the costs of drugs are in one way or another attributable by factors linked to interdiction and its perils (click here to read Render’s paper in pdf format)….[More]
Of course tax revenue is only one angle here. Proponents argue that there would also be significant savings on law enforcement for what now amounts to petty criminal possession. Resources currently used to enforce marijuana laws could readily be redeployed to more critical security needs.
Of course if we really think outside the box, we could co-opt the Pentagon to support legalization. After all this clip from History of the World Part One offers another view on marijuana as a strategic weapon. ;)
In case the embed is disabled you can click here to launch the video in a new window: Mighty Joint Video
A revenue and legalization lesson from FDR
James Saft, Reuters, February 25th, 2009