By Trevor Hanson
According to the website Forbes.com, legalizing marijuana would create $8.7 billion in federal and state tax revenue annually. It is assumed that legalized marijuana would be taxed at the same rate as alcohol and tobacco, which is at about 15%. The income earned by marijuana growers and producers would be issued to standard income and sales tax. But taxes aren’t the only source of revenue that would come from legalizing this drug, state and local governments would also be set to save billions of dollars that they are currently using on regulating marijuana use. $42 billion dollars is spent every year on the enforcement of illegalized marijuana, which is a very staggering number knowing that we could be using that money for a lot of other important things such as health insurance for kids or even better pay for teachers. There are multiple ways that the government could utilize this massive amount of money.
Both Washington and Colorado have legalized recreational use of marijuana in the past year and this will serve as an experiment to gauge the possible fiscal impact that the legalization of marijuana could have on a national stage. So far there are 18 states that have legalized medical marijuana and there are many other states seriously considering it as well. Unlike alcohol or tobacco there has never been a death to a person directly related to marijuana, but yet for some reason it is still widely frowned upon by our society. If someone is pro-marijuana they are often looked down at as a “pot head”, but people are struggling to see the real and positive effects that this drug could have on our country and economy. It happened with alcohol during the prohibition and it only seems that the time has come for marijuana too.
Works Cited
http://www.article-3.com/legalize-marijuana-bolster-the-economy-with-13-7-billion-910286
http://www.economist.com/news/united-states/21573135-americas-first-market-recreational-marijuana-will-be-far-free-tax-and-tax-again
http://www.forbes.com/sites/anthonynitti/2013/09/24/understanding-the-impact-of legalized-recreational-marijuana-on-state-tax-revenue/
http://www.mpp.org/media/op-eds/the-war-of-pot-americas-42.html
Trevor,
ReplyDeleteYou raise some very interesting points in your post. You might also want to check out this source. http://theweek.com/article/index/236671/is-marijuana-bad-for-you
Thank you!
Mr. Batterman
While marijuana may help the economy, people will always be illegally growing it. An example of this would be the cigarette smuggling operations - called buttlegging - which is used as a form of tax evasion. With that said however, it should be noted that by legalizing and taxing marijuana, it would indeed bring in an additional source of revenue. Just not as much as you may have previously thought.
ReplyDeleteIt is clear that there are some possible benefits for the economy with legalizing marijuana but as of right now no one knows just how much. Therefore I think the results coming out of Washington and Colorado, based on incidents related to people being on the drug and the income created from it will decide whether this is something that continues in our country.
ReplyDeleteI agree with Ben in that we don't entirely know how it will benefit the economy. I know you mentioned that we spend billions on illegalizing it per year, and that it will rake in substantial amounts of tax revenue; although, I think it's important we let the cards play out in Washington and Colorado, and make a decision from there. Furthermore, if it were legalized, I feel as if it there will be a few kinks to work out because there will still be illegal transactions and there will still be people growing it illegally. Although it may sound like a good idea financially, I think even more problem will be created if marijuana became legal.
ReplyDeleteI totally agree with your article. By not taxing this drug we are letting millions of dollars slip away. It is a well known fact that smoking is bad for you but that doesn't mean people won't still do it. Sure there will be some people who grow weed illegally but in my opinion this would cut the number down dramatically. This money can either be given to Mexican cartels or taxed and used for good right here in the US. I don't know about you but given the choice between Mexican cartel and US government, my decision is a pretty easy one.
ReplyDeleteI bet in the next decade marijuana will be legal for recreational use in the United States. Though Colorado and Washington legalized marijuana it's an experiment. If it goes well more states will start legalizing it. Therefore, it will help the revenue flow for the economy. Like Alex was saying, there will be a few kinks that would need to be worked out. The government would have to make restrictions on the use of recreational use of this drug.
ReplyDeleteI agree that a lot of revenue could come from the legalization of marijuana, but there is still a lot of unknown. Most Americans know little about marijuana and how it affects individuals and in turn society. However, just because something can bring in profit doesn't mean it should be done for example prostitution. Clearly we will have to see how the experimental trials in Colorado and Washington go before final conclusions can be made.
ReplyDeleteMost people don't know all the effects of marijuana while we are able to sell cigarettes and Tobacco products and I believe recently that the U.S. put a high tax on tobacco so that less people would buy it be people are still buying it. So if we legalized marijuana we would have to tax it obviously so that we can gain a profit and try to get out of the deficit though it wouldn't be enough to get out. It would be a good start.
ReplyDeleteWhile Colorado and Washington will be the real examples in the United States, Portugal has had success not just with decriminalizing Marijuana, but also abolishing all criminal penalties for personal possession of drugs, including marijuana, cocaine, heroin and methamphetamine. If we look to other countries such as Portugal, who have decriminalized drugs, we can see that they have reduced drug use by decriminalizing them. Maybe it is time that the United States follow the example.
ReplyDeleteI like this topic because I hear people talk about it all the time. Although the drug today is classified as "illegal", it has never done anything to the human body. You see people get cancer and die from smoking cigarettes, but marijuana has never had a known case of killing someone. It is also used in the medical field for treating certain kinds of cancers. Although it has its side effects, most people don't want to legalize it because they don't want to deal with that aspect of the drug. I don't see any wrong in legalizing marijuana, but I would like to see more information on what would happen to this country if we were to legalize it in more states. I believe that cigarettes and other drugs should become illegal or remain illegal because of the fact that it makes you very sick (cancer) and can kill you.
ReplyDeleteI believe that smoking any sort of drug or plant is a persons choice. When it comes to legalizing MJ I believe that the government is doing a plus for the economy. It will create a spark to get it going people are going to be like yes about time I can do it without getting in trouble and the government is going to be making money off of taxes. Sure there is going to be smuggling and illegal activity but the cost of police trying to stop it will decrease and save money for our government even more. After a while its just going to be like smoking cigs no one will care. So start investing in big companies now to get a huge pay day in the end.
ReplyDeleteAlthough legalizing marijuana may help with national debt, to those who use marijuana legalizing it could be a potential downfall. Yes with legal matters there would be a lot more leniency, however, there daily ganj would be taxed which could cause a drastic dent in there overall income. I agree with garett, smoking any sort of drug or plant is a personal reference, marijuana is the least of worries for America. That's why legalizing it should be okay but as far as taxing marijuana it could be a serious money problem for citizens.
ReplyDeleteLegalizing marijuana would be a great thing from the standpoint of the government and debt. It's also a much better option from the standpoint of a citizen as the government could also be worrying about things that matter rather than just a drug that doesn't really do much harm. From a health standpoint I believe marijuana is much safer, and healthier than alcohol and other legalized drugs.
ReplyDeleteIt is unclear of how much revenue can be pulled from selling marijuana. But due to the high use of marijuana, there will probably be a lot of profit coming in. Eventually other states will probably follow Colorado and Washington in legalizing marijuana. And this will probably stop some flow of illegal activity, since the drug will probably become common.
ReplyDeleteWhile the economic aspects of legalizing marijuana may help the economy, it is still unclear what kind of affects it would have on society. A lot will be learned from the states who have already legalized the drug. With a high tax it still might lead to illegal growth and sales of the drug.
ReplyDeleteTrevor, I'm your good friend. As your friend, I want to assure you that this comment will be completely free of bias from our friendship. This is brilliant. The economy lags, and yet old minded and conservative politics and economics are passing a blind eye over what is potentially one of the biggest economic and industrial leaps since the conveyor belt (which, curiously enough, was popularized by Henry Ford, a well known supporter of the hemp plant and endorser of its potential as an industrial super plant). You see, smokeable marijuana isn't the only thing that comes from the hemp plant. Smoking it, however, has been widely known for centuries to be an effective medical aid for pain relief and a multitude of other health issues. But this is merely one level of the potential of this plant. Paper. Clothing. Shoes. Industrial grade cement, even. These are all products (only a few among over 3000, mind you) that can be produced by industrialized hemp. "We can get paper from trees, and cement from gravel mixes. What do we need hemp for?", some might ask. Well, thats an excellent question. And I, as well as researchers in Washington, have an excellent answer. Hemp is an annual crop. This means that every year, multiple times, if necessary, a crop of hemp can be fully grown, cultivated, and harvested. Trees, however, take many years to grow. Hundreds, even. The paper from them is weak, and degradeable. Not to mention expensive. Deforestation is a very real threat to the well being of the planet. More than 7 billion people rely on the trees--called by poets as the lungs of the earth--for the oxygen that is released as the byproduct of photosynthesis. Deforestation is quite literally suicidal. If you were scuba diving, would you remove your oxygen tank to use it as something as trivial as say, a container for coral? No? Then why in the hell would we, humanity as a species, cut down the very trees that breathe life into us? Why not instead use something much easier to grow, and much more renewable? Something like hemp.
ReplyDeleteANother reason this is so brilliant, Trevor, is that not only would it create a massive billion dollar increase in the revenue of the U.S.A, it would also deal a serious blow to the revenue of one of the most corrupt, and dangerous organizations in the world: The South American Cartels. These cartels, which generate and absolutely massive amount of money through the distribution of drugs, would take a heavy blow if their second biggest product was all of a sudden legalized in the US, their biggest customer. If Marijuana was legalized here, then there would be no need for the Marijuana provided by the cartel, as much higher grade crop could be grown and developed here and sold domestically. Also, for the impoverished farmers of countries such as Colombia and Peru, who are under the iron and violent rule of the Cartels despite their democratic fronts, would no longer be forced to grow the coca leaves that fuel the cartel's cocaine industry. If they were given opportunity to grow a legalized product such as marijuana and then sell it to legal buyers in the US free of tariff, they would finally be able to escape the perpetual circle of poverty that forced them to grow and sell coca leaves as a lst resort to feed their children. This would not only increase their quality of life overtime, but deal a second blow to the cartels--almost like an aftershock after the initial earthquake--and would reduce the cartels revenue even more. We would effectively be killing two birds with one stone, and on a grand and noble scale no doubt.
Overall, I feel you did an excellent job, and I'm proud of you Trev. Good Job.
I agree that the legalization of marijuana would definitely stimulate the economy and finally pull us away from the seemingly ever-lasting effects of the Great Recession in 2008. With this product on the market, the economy would see a huge turnout in revenues and change the face of debt we see today. Although there will definitely be a continuation of illegal growing and selling of the drug, but what substance hasn't seen that situation? Moonshine is made and sold everyday, even though there is no ban on the sale of alcohol. Cuban cigars are smuggled in regardless of the long lasting ban we have had with Cuba on trade. All in all, the there will be a huge benefit to this new product for sale rather than keeping it from the people. No matter if the government decides to legalize the drug or not, there will be individuals selling and smoking the drug, thus the economy might as well get in on the benefits.
ReplyDeleteI agree that the benefits of legalizing marijuana could be substantial but like John Soo said whether we legalize it or not people will continue to grow and sell it illegally as they do with products like moonshine.
ReplyDeleteI completely agree, Trevor. You make a valid point by stating that it will stimulate the economy. Although legalizing Marijuana and taxing it seems kind of taboo, it really would be a beneficial source of income. Something similar happened with the prohibition, yet it was overcomed and now alcohol produces a great deal of revenue. It just makes sense to legalize it, especially because it's irrational for some states to legalize is recreationally, others to legalize medical Marijuana, some to just decriminalize it, and some to make it completely illegal.
ReplyDeleteAll though it sounds like a good idea it could also relate in a negative way as well. The fact of how cars can run on hemp oil amazes me that would be considered a plus and we wouldn't necessarily have to rely on fossil fuels. I was reading online that Colorado had taxed marijuana creating 2 million dollars in the last 3 months that's insane. Yes they are a lot of benefits such as getting more out of debt with taxing it and also having less "criminals" in jail and would reduce the crime rate its helpful in those ways. Evan if we did legalize it regardless if its illegal or not people are going to use the product. By legalizing it there could be a down side to it as well such as it would influence others in thinking that its okay to do. Everyone has their own opinion and mine is that although it sounds like a good idea by legalizing it just cause more issues...look at alcohol when that was legalized in the 20's people didn't know how to handle themselves and still today people cant handle themselves so why bring another substance in? I like it just the way it is because more people are cautious. Meaning they aren't as stupid in public. I'm pretty sure back then before legalizing alcohol people would drink responsibly and there weren't as many problems. I feel as though that that's the same thing with Marijuana. But i do believe that although they are both bad I believe that Marijuana is more beneficial than alcohol
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