Taxation and Inhalation

There is one bloc in America that has consistently asked to be taxed: pot smokers.  For decades, marijuana use has been seeping into the mainstream, and in places like California, where medical dispensaries have led to de facto legalization, it is almost as normal as tobacco or alcohol (two more dangerous substances).  A recent poll found that 56% of Californians support legalization and taxation. Taxing marijuana would recognize small scale marijuana possession and consumption as no more insidious than drinking a beer or smoking a cigarette, and it would therefore mean that marijuana users would not be stigmatized as deviants.  In short, taxation equals normalization; inhalation with taxation is the dream.

Since California legalized medicinal marijuana in 1996, there has been recurring debate about how far the process should go in the country as a whole.  The debate was rejuvenated in July when the city of Oakland increase its taxation of medical marijuana.  Now at 1.8%, the measure is expected to raise almost $300,000 of additional revenue in 2010.  Estimates for the revenue that could be generated nationally range wildly, but no one doubts that it is a significant amount; for California, the estimates range from $105 million to $1.3 billion.  (This Slate article provides an overview of competing figures and opinion polls.)  In 2005, CNN estimated that only $800 million would be raised nationally, which is quite on the low end; the report does not explain its methodology, but I wouldn’t be surprised if the chart is only revenue at a state level and so does not reflect on how much revenue the federal government could receive.

The most rigorous recent analysis is a December 2008 paper by Jeffrey Miron, a professor of economics at Harvard.  Unlike a lot of reports on the topic, Professor Miron also looks at the fiscal savings of legalization, i.e. the money governments will save when they do not have to enforce petty crime laws.  He finds that the national savings would be $13 billion annually from legalizing marijuana; legalization would also raise around $6.7 billion.  (He also looks at savings from legalizing cocaine and heroin, but I think those steps are not fruitful right now.)  In other words, legalizing marijuana would have an aggregate impact of $20,000,000,000; according to the author, this sum is a conservative amount.  Legalizing marijuana would go a long way to paying for health care or high speed rail or weapons procurement (to placate conservatives).

It’s a common defense of legalization to say that high citizens don’t commit violent crimes; this is true.  Aside from the financial reasons to support legalization (and they always seem more pertinent in recessions), there is the moral one: it’s just not a dangerous substance.  The only way to die from marijuana is if a joint burns your house down.  The only logically consistent way to support marijuana prohibition is to also outlaw tobacco and alcohol, and I don’t see that ever happening.