The Budgetary Implications of Marijuana Prohibition

Harvard University ^ | June 2005 | Jeffrey A. Miron

[davesdude]

Executive Summary

Government prohibition of marijuana is the subject of ongoing debate.

One issue in this debate is the effect of marijuana prohibition on government budgets. Prohibition entails direct enforcement costs and prevents taxation of marijuana production and sale.

This report examines the budgetary implications of legalizing marijuana – taxing and regulating it like other goods – in all fifty states and at the federal level.

The report estimates that legalizing marijuana would save $7.7 billion per year in government expenditure on enforcement of prohibition. $5.3 billion of this savings would accrue to state and local governments, while $2.4 billion would accrue to the federal government.

The report also estimates that marijuana legalization would yield tax revenue of $2.4 billion annually if marijuana were taxed like all other goods and $6.2 billion annually if marijuana were taxed at rates comparable to those on alcohol and tobacco.

Whether marijuana legalization is a desirable policy depends on many factors other than the budgetary impacts discussed here. But these impacts should be included in a rational debate about marijuana policy.

http://www.prohibitioncosts.org/mironreport.html

[davesdude]

"I have NO idea what you just said."

referring to an older post without noticing there was already 200 post! i stop writing for about a couple of hours!
and not intended to you!! sorry!

[davesdude]

""Well, since I'm obviously a raging idiot who knows nothing about drugs, and you are a never-ending font of drug knowledge, why don't you tell me what the difference in chance is? All I said was that ODs are still possible with pure product."

ok, i am going a bit in flame...so tell me why do you think i am saying that unpure products OD VS pure product OD? because it is important to say it than just leave it simply to: "ODs are still possible with pure product."

I apologize on using bad words, but do you agree on the above...To me it is just logical to state this, as no study have obviously been done on the matter...It is just common sens!"

and you stated: i have no idea of you are talking about...

okay found back the post...what don't you understand about this one, i'll be glad to help you with it...i was confused with another post i made to "GLDNGUN"... sorry for the confusion, but i never thought this subject would create such a reaction!! i never thought so many people would disagree with three Nobel laureate!!!

[davesdude]

"If MJ were legal, Wal-Mart would not sell it? Or Sam's Club, Alpha-Beta?

What do you envision for legal retail sale of cannabis products?

There already is MJ candy and even peanut butter in CA."

wal mart?? hell no! well that would be stupid to do that don't you think?? I think i stated above coffee shop as legal retailer...the best way to keep it safe and strongly regulated...And those MJ candy you are refering to are sold in the "medical clinic"...but i disagree with that kind of behaviour, because it promotes the product, and to a certain extent, kids wouldn't make the diference if they found it... so strict laws should be made against advertising and all kind of way to get people to try the drugs, somehow, against their will...

if you want to smoke pot smoke it, but if you don't want, you have the right not to get fooled by marketing strategy...

[TKDietz]

"The Amsterdam model doesn't solve the tort issue anymore than gathering all smokers together would have alleviated the Big Tobacco law suits."

I don't think this tort issue you keep talking about is nearly as much an issue as you think it is. The plaintiffs in these tobacco lawsuits were not successful in court because tobacco is an addictive and harmful product. They were successful because tobacco companies knew good and well their product was addictive and harmful but lied about it. Under our tort laws there is a duty to warn about the dangers of the products you produce an sell. The tobacco companies not only didn't warn about the dangers of their products, they lied through their teeth about the dangers. They said forever that tobacco was not addictive even though they knew it was. They played dirty. Many of them even went out of their way to market their products to children, all the while denying the dangers and in fact putting a lot of money and effort into producing bogus science to back up claims they knew were false.

If marijuana is legalized, those that produce it and market it will subject themselves to tort liability if they fail to warn about the dangers of their products. They wont be able to come out saying that it is absolutely harmless, completely nonaddictive, and so on. Instead we'll probably see all sorts of warnings prominently displayed on retail packages. Big corporations producing it will no doubt want to avoid liability and it wouldn't surprise me at all to see them not only warning consumers about the dangers of their products, but also spending a little money on programs to do things like discourage use by children and encourage use in moderation by adult consumers. They'll do these kinds of things to protect themselves in the even they are sued. "Big alcohol" does the same thing today. Are they getting their pants sued off? They certainly sell a dangerous product that can be both addictive and harmful.

I am for legalizing marijuana and regulating it similar to the way we regulate alcohol. I'm pretty confident we'll see that happen some time within the next twenty years or so. I am not for legalizing any other intoxicants, and I don't think we'll ever see the day when drugs like meth and heroin are legal and regulated similar to the way alcohol is today. I think that would be a terrible idea, but the same sorts of things would apply with respect to tort liability with these drugs if they ever did become legal. Companies producing and marketing these products could probably protect themselves fairly well from product liability suits by doing things like taking strong quality control measures, selling their products in child proof containers, and warning consumers about the dangers of their products. Because those products are so dangerous, the tort liability risks would be greater for those producing and marketing them, but the fact is that some products available on the market today are just inherently dangerous yet companies are able to produce these products and make a profit avoiding major lawsuits that would bankrupt them because they take steps to make their products as safe as they possibly can be and go out of their way to warn consumers about the remaining dangers.

Compared to something like alcohol, marijuana is not that incredibly dangerous. Tort liability in a legal marijuana industry wouldn't be any worse than it is for the alcohol industry. Tort liability for other drugs might be worse, but not that much worse provided those in that business take the appropriate steps to protect themselves. Again though, I would be totally against making any drug other than marijuana legal.

[davesdude]

"The Amsterdam model doesn't solve the tort issue anymore than gathering all smokers together would have alleviated the Big Tobacco law suits."

i am not sure i took "good enough" english courses to understand that but let me try... from what i understand (please correct me if i am wrong, because if you have a point i want to understand it!) you say that it will come to the same issue than smoking in bars...or that it will be unfair for tobacco smoker not be able to smoke in public places as weed smokers will be able to do it? i will wait for your reply, i don't want to write for nothing, in case i didn't understand!

[davesdude]

Forget my previous post...TKDietz answered my questions!

[Beckwith]

"During prohibition, it was legal for an individual to make their own alcohol products for 'personal use.'"

This is absolutely false.

You are absolutely incorrect.

Just from the first page of Google ~ search criteria ~ "18th Amendment" "personal use"

In response to the massive outcry of many Americans against alcohol consumption, Congress passed the 18th Amendment in 1917. It banned the commercial production and sale of alcohol in America. The Volstead Act was ratified in 1920 and expounded on the actual implementation of Prohibition. It also mandated several loopholes in alcohol production and consumption. Physicians could prescribe alcohol and it could be consumed for religious purposes. Additionally, a head of household was legally allowed to produce 200 gallons of wine a year for personal use. This was largely a concession to the significant Italian-American electorate.

http://www.goarticles.com/cgi-bin/showa.cgi?C=20425

In January 1919 the 18th Amendment was ratified, establishing national Prohibition one year later. The possession of alcohol for personal use is still permitted; enforcement authorizations are kept minimal and left to the states.

http://www.tc.columbia.edu/centers/cifas/drugsandsociety/background/chronologydruguse.html

The 18th Amendment became law all over the country on January 16, 1919. One year later, the Volstead Act, named after Congressman Andrew Volstead of Minnesota, was passed to enforce the amendment. Prohibited beverages were those containing more than 0.5 percent alcohol. However, liquors sold for sacramental, industrial and medicinal purposes, and fruit or grape beverages prepared for personal use in homes, were exempt from the law. And so, the era known as Prohibition began on January 16, 1920.

http://www.epcc.edu/nwlibrary/borderlands/19_prohibition.htm

I expect you to go mute on this issue. However, if you wish to dig a deeper hole, I'd be happy to bury you in it.

PS ~ Don't take this response personal. I just hate to see bad information disseminated.

[Smogger]

There is crime, and then there is extremely profitable crime. Trafficking in controlled substances is of the extremely profitable variety, and it was and is a tremedous step up from say running numbers or sticking up banks.

Saying that all criminals and criminal enterprises are the same and do the same harm to society, which is what you appear to be arguing, is laughable on its face.

[davesdude]

"There is crime, and then there is extremely profitable crime. Trafficking in controlled substances is of the extremely profitable variety, and it was and is a tremedous step up from say running numbers or sticking up banks.
Saying that all criminals and criminal enterprises are the same and do the same harm to society, which is what you appear to be arguing, is laughable on its face."

Thanks for pointing out...it is a good point against those who argue that prohibition on pedophils and bestiality, or murder, are the same thing than prohibition on drugs... Those prohibtion are done because a lil minority of people kill, abuse children or dogs... oppose to marijuana, almost half of continent is using or have at least tried it, what's the point in prohibiting something ALMOST a majority aprroves...

[tacticalogic]

i never thought so many people would disagree with three Nobel laureate!!!

Dogma is immune to reason.

[davesdude]

" Don't take this response personal. I just hate to see bad information disseminated."

Thank you must hate John Walter and friends(government), for spreading such lies against marijuana! I read in an article that had a reference to a DEA "study" stating that smoking pot can grow tits on man, because of an hormonal problem!! maybe it happens sometimes but only because some people can't control their munchies!! Other wise, every man i know that smokes pot didn't grow tits!

[Beckwith]

Well, the last time I smoked marijuana, I discovered a firm and extremely well defined set on my chest.

But they weren't mine.

LOL!

[davesdude]

"Thank you must hate John "

msut read : than you...

[davesdude]

Haha! thanks for the laugh!

[TKDietz]

I stand corrected. I was not aware that the Volstead Act created that exception after Prohibition was enacted. It is interesting that only wine was allowed, but people could not produce beer for personal use.

[davesdude]

"Dogma is immune to reason."
I don't know the exact definition of dogma, but i saw a movie of that same name, and i kinda understand where you wanna go...And i totally agree!

[davesdude]

but what do you think about what your government gives as "reliable" information on marijuana? like you have already experienced it, i think you saw it wasn't the most dangerous drug, like the DEA claims on their site...

[TKDietz]

"Did Prohibition create crime? Certainly not. Laws do not generate crime; criminals generate crime. When Prohibition ended, the criminals didn't go away; they moved on to other markets such as bribery, drugs and gambling. If we legalize drugs, the criminals will move onto other markets such as human trafficking and sex slaves."

Prohibition did create crime, and it created very rich and very well organized criminals. That was an unintended consequence, but it was a consequence of Prohibition nonetheless. The demand for alcohol still remained when Prohibition was enacted. An illegal industry sprung up overnight to rake in the millions of dollars to be made. Since there were no laws regulating the industry and no legal avenues for those in the industry to resolve disputes, the biggest baddest gangsters reigned supreme over the industry. Business disputes were often resolved with violent means rather than in courts. All the money to be made encouraged hundreds of thousands if not eventually millions to become involved in the trade in one way or another, whether they were producing alcohol, smuggling it, transporting it, selling it, or taking bribes to look the way when it came to these activities.

Did all those involved in the illegal alcohol industry just move on to other criminal enterprises after Prohibition was repealed? I don't think so. I've seen estimates on this and apparently only a relatively small percentage of those involved in the illegal industry continued in their life of crime. I don't really know how people come up figures for this sort of thing but it makes sense to me that most people involved in the black market for alcohol did not just move on to other criminal enterprises. Think about the people who were involved. There really were probably hundreds of thousands if not millions involved in the industry in some capacity or another before Prohibition was finally repealed. Most of us probably had a grandfather or great uncle or some other relative who did something like operate a still or transport booze during Prohibition. I know one of my grandfathers and his brother had a still and when they weren't selling their own liquor they were running it for someone else. Neither of them went on to other criminal enterprises after Prohibition was repealed. One went to work in the ship yards and the other built homes. We had a lot of regular Joes working in the black market for alcohol. Some got rich. Most probably just eked out a living or just made a few extra bucks. Some were hardcore criminals without consciences who had no moral qualms about doing things like stealing, pimping out women, extortion, whatever. Most people involved weren't like that though. I don't think things are that much different in the marijuana business today.

[Marxbites]

Ain't it the pits?

When will America wake up to the fact that the elites from the beginning of the progressive era thru now have rigged our Govt to benefit themselves while taxpayers hold the bag.
Welfare and warfare are merely the tools of diversion and complacency.

Propaganda schools to mold minds away from individuality and critical thinking - "the easier to dupe you with my dear".

A socialist security system a la Bismark.

High and graduated taxes a la Marx.

Centrally planned society and economy a la Marx/Keynes.

Property rights no longer the cornerstone of our Republic.

It's the freaking Commie Manifesto, nearly en toto, alive and well in Amerika! A subtle but heady blend of socialism, fascism and corporatism, all rolled into one in the name of Democracy - that sorry state of majority rule that the founders abhored and sought to save us from, isn't found even once in the Declaration OR Constitution. Who'd a thunk it?

I want to put you on some good stuff I think you'll appreciate:

http://www.cato.org/event.php?eventid=2655

http://www.cato.org/event.php?eventid=2659

[SampleMan]

First, I'd like to congratulate you on being the first "pro-legalization" poster to acknowledge the hurdle of tort law. I further think you make some good points, but broad stroke the ability of corporations to inoculate themselves from liability by simply stating the dangers of the product. This has not worked with other products. Fully half the cost of a ladder is to pay the companies tort liabilities. Ladders are covered with every conceivable warning. If that was all that was required, every product manufacturer would simply state that their product could be lethal (which most now do) and their problems would be solved (which there not).

I think you are correct about the ability to legalize MJ, but not more destructive drugs. The one recurring theme that will be argued though is that its use is intended to be intoxicating, while alcohol can and generally is consumed in moderation. I've never smoked pot, so I don't know if that's valid or not.