What are the costs? Secondly, given the slope of the demand curve, a fixed tax per ounce will not be effected by price.How does legalizing pot increase revenues? That is pure speculation without a corresponding look at the COSTS associated with legalization and the decrease in prices that will impact any perceived benefits to tax revenue.
Here is a great article that throws some cold water on these false assertions:
Media Talk Up Pot Legalization as Possible Answer to Bad Economy
But according to a report by National Public Radio’s John Burnett on the April 20 broadcast of “All Things Considered,” the theory that legalizing this vice would bring in big bucks for the government is a myth.
“A lot of people think this taxation of marijuana will create a windfall for government coffers,” Burnett said. “[J]effrey Miron is a Harvard economist who has studied and written about the economics of the marijuana market. Miron figures state and federal taxes on cannabis sales adds up to $6.7 billion annually. And he calculates the savings from not having to enforce state and federal marijuana laws, in arrests, prosecution and incarceration, at $12.9 billion a year.
I think i can agree with everything minus the bold. Then again, you would have to define "big bucks" which is all very relative.
Additional health costs and administering the new law? Hmm, sounds fishy to me.Excluding additional expenses, such as the public health cost of marijuana, or the cost of administering the new law, Miron figures that legal pot creates almost a $20 billion bonus.”
Strawman. An additional $20 billion in federal tax revenue sounds pretty good to me.With a federal government that is on track to be running $1-trillion deficits, that’s just a drop in the bucket, and doesn’t necessarily justify legalization, as advocates and some in the media suggested.
Another fallacy. What does alcohol have to do with this in the context of the costs associated? Given that one is essentially poison, induces aggression, causes all kinds of ailments, and the other has been proven to make you relaxed and hungry, you are going to have to jump on weak limb to correlate both obesity and motivation issues.This theory also ignores the societal costs of such legalization. The legalization of alcohol brings in billions in tax revenue, but the costs for alcohol addictions and treatment super exceed any revenues they have brought in thus making it MORE costly for states rather than bringing in revenue.
Not really. It might be fun for some to grow their own [whatever], but that is just not a very rational economic idea. I bring up the financial aspect because, you are stating that it will reduce tax revenue.One thing that is often overlooked in the recent string of media coverage about marijuana legalization is what would happen to the market if it were a legal drug. The revenue-generating potential would be greatly reduced if it were legal to be grown anywhere.
You are ignoring a fundamental law known as opportunity costs and its effect on specialization. I am good at growing cannabis, but you know what, i am even better at bidding for industrial service contracts. Since i can make more money doing what i do best, it is rational for me to receive money for doing it, and then trade that money to someone who specializes in growing cannabis. It is this kind of economic transaction that has pushed the US into a highly developed category. Imagine if everyone grew their own food, tobacco, and brewed/distilled their own alcohol. They would not have nearly as much time to devote to the things in which they are the most productive....
Wrong. People do not grow grains/grapes so that they can distill their own alcohol to avoid the pigouvian taxes levied, nor do they grow their own tobacco to avoid taxes.... Again, the opportunity cost rule applies here as well.“The price is very important,” Regan said. “Because, think about this guys – it really wouldn’t be this expensive if it was legal.”
“You’d get a glut,” “Power Lunch” co-host Michele Caruso Cabrera added.[/I]
Basically, the tax potential of pot becomes significantly diminished when it is now grown everywhere and becomes common place. After all, why pay taxes if you can grow the stuff yourself and avoid the extra cost right?
Opportunity cost just keeps popping up. If police are no longer busting pot dealers, and weed smokers, they will logically have more time to spend worrying about hard drugs. Although i do believe all drugs should be legalized.But about them cartels, chances are they will continue to thrive pushing the REAL cash items like cocaine and heroine.
Your post provides little credibility to this premise....The notion that legalizing pot will be this panacea for over extended budgets or even revenue enhancing is nothing more than wishful thinking and false arguments from groups who just want to sit around and get stoned without worrying about enforcement.
Wow, i guess for this to be true, getting stoned would have have similar effects to alcohol. Care to provide a link that would make your post credible?How about the current costs to society for alcohol related abuse?
1.8 Who Bears the Costs of Alcohol and Drug Abuse?
Much of the economic burden of alcohol and drug problems falls on the population that does not abuse alcohol and drugs (see table 1.3). For alcohol problems, governments bore costs of $57.2 billion (38.6 percent) in 1992, compared with $15.1 billion for private insurance, $9 billion for victims, and $66.8 billion for alcohol abusers and members of their households. For drug abuse, governments bore about $45.1 billion (46.2 percent) of the total of $97.7 billion; private insurance, $3.1 billion; victims, about $6.5 billion; and abusers and members of their households, $42.9 billion.
Costs are imposed on society (nonabusers) in a variety of ways. These include drug- and alcohol-related crimes and trauma (e.g., motor vehicle crashes); government services, such as criminal justice and highway safety; and various social insurance mechanisms, such as private and public health insurance, life insurance, tax payments, pensions, and social welfare insurance.
The costs primarily born by abusers include (1) lost legitimate earnings (and household productivity) related to impaired functioning in the labor market; (2) lost legitimate earnings related to incarceration; and (3) foregone legitimate earnings when drug abusers pursue income through illegitimate means, including predatory and consensual income-generating crime (e.g., theft, drug trafficking, and prostitution). Even these costs are shifted somewhat. Lost earnings translate into lost tax revenue (a shift to government), and income from theft accrues to the benefit of abusers - a loss for victims. It is more difficult to assess the incidence of burden from the drug economy, where abusers forego legitimate earnings for income from other sources. This is discussed briefly in chapter 7.
Economic Costs - Chapter 1
What are these costs you keep referring to? Last time i checked, alcohol is not cannabis, and your comparison is about as fallacious as it gets. But do explain these costs associated.Anyone who thinks similar costs reflected in alcohol abuse won’t also translate over to legal pot use is wallowing in denial. While the health related costs may be much less, the other associated costs are valid arguments to NOT legalizing this drug; and it is a "drug."
You do get an A for effort
Last edited by Kushinator; 09-11-09 at 02:59 PM.
It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
"Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911
As for tobacco, it's a LOT more difficult to grow. It doesn't have the nickname, "weed." People are starting to grow their own though now that taxes are getting ridiculous.
Jackboots always come in matched pairs, a left boot and a right boot.
We would almost definitely save money on the enforcement and punishment currently devoted to marijuana users, growers, and sellers. However, it's misleading to state that it would put the cartels out of business. They'd switch most of their business over to harder drugs, as they have done so in the past decade, such as methamphetamine. Anyone who thinks meth should be legalized for local production is an idiot.
sigh I get tired of the same old arguments over and over.
really???according to a report by National Public Radio’s John Burnett on the April 20 broadcast
We should be saving every last penny we can.With a federal government that is on track to be running $1-trillion deficits
Who says it should be legal to grow anywhere? To insure quality, disrupt the black market and insure legitimacy of the supply it should be strictly controlled, and only allowed with a license.One thing that is often overlooked in the recent string of media coverage about marijuana legalization is what would happen to the market if it were a legal drug. The revenue-generating potential would be greatly reduced if it were legal to be grown anywhere.
Sure there will be a few people who will be hobby growers, but it will not be everyone, most will find it much easier just to drive down the road and buy some instead of dealing with doting over a crop in hopes that it will have a good quality yield.
This will be minimal, just as the number people who currently run their own still is minimal. If you are growing unlicensed, then you are subject to heavy penalties for tax evasion, just as is the case now for illicit stills.
as for the costs presented from the NIDA.. many can be written off as the cost of prohibition, not the costs of the drugs themselves. The rest will be there regardless of legality.Originally Posted by Truth Detector
Let's look at the breakdown:
Total healthcare expenditures from drugs: $9,931 billion
This is a cost that is there prior to legalization, and one that will be there post legalization, irrelevant (unless you are prepared to provide solid evidence that there will be a substantial increase in usage that contradicts the data that says otherwise).
Premature death from drugs: $14,575 billion
dunno how you are supposed to put a dollar4 amount on the costs of death, but there it is. Of course these deaths will be almost entirely deaths outside of marijuana, unless they decide to attribute any deaths that occur with mj present in the system as being caused by mj. The drug itself does not kill.
regardless even if we were to legalize ALL drugs this number will decrease. No more overdoses from a bad batch, substantial decrease in HIV, and many more. and again if you want to argue otherwise as a result of increased usage you need to overcome the growing body of evidence that there is no significant correlation between legality and usage.
ok moving on..
impaired productivity from drugs: $14.2 billion
again a cost borne regardless of legality (unless as is likely they are counting time in jail as loss of productivity).
institutionalized populations and incarceration: 19.4 billion
this is not a cost of drugs, this is a cost of the war on drugs.
Crime careers: $19.2 billion
included in this number is guess what.. drug dealing (that goes away). All you will be left with is theft and prostitution, both costs that are there independent of whether drugs are legal or not, and in all liklihood both of these will decrease.
then add in another $20 billion for victims of crime, and crime (dunno how crime manages to get counted 3 times)
Then of course there is the ~$20 billion year for the ONDCP budget.
in a nutshell the costs you cite are one of 2 categories
1) costs that will be there regardless of legality (including a few that will likely decrease)
2) costs that are the cost of the war on drugs, and not the cost of the drugs themselves.
the latter will all go away.
but of course as you pointed out in the beginning of your argument (before it became beneficial to bolster your position) that these are all drops in the bucket compared to a trillion dollar deficit.
Last edited by marduc; 09-11-09 at 06:23 PM.