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

[TKDietz]

I have read that product liabilty concerns actually tack about 20% onto the cost of a ladder on average, not 50%. That's still a high percentage of the cost. Most ladder lawsuits that succeed do so because plaintiffs successfully argue that the ladders were defective, either because of a design flaw or a problem in manufacturing the product. Whether the plaintiffs are suing a negligence theory or strict liability or a breach of warranty theory they are going to have to prove in most every case that ladder either wasn't designed properly or wasn't manufactured properly. The warnings are probably going to be okay because like you said there are warnings plastered all over ladders. There are an awful lot of these lawsuits because a lot of people get hurt using ladders and there are often problems in the design or manufacture of these things. I have a friend with a ladder company and he doesn't pay his employees very much and every once in a while a ladder is going to pass through inspection with an unnoticed defect. He's been sued a few times and his liability insurance cots are high.

There are a lot of differences in pot and ladders though. Marijuana is a plant. There aren't going to be any design flaws. It is what it is. There could be negligence in producing it though, for instance if toxic fertilizers or pesticides are used that injure consumers. Producers would have to be careful about that, and they'd have to be careful to inspect for things like mold or fungi that might harm consumers. This isn't anything those producing other agricultural products don't already do though. It's not that big of a deal and I don't think marijuana producers are going to have much more to worry about as far as producing a defective product goes than others who produce different types of consumable agricultural products. As long as they have good quality control and watch what types of chemicals they use the only real worry they are going to have is in making sure they fulfill their duty to warn consumers about the known dangers of their products. And like I said before, there isn't any reason why their tort liability costs would be any higher than tort liability costs for the alcohol industry.

As for the argument that marijuana is used solely for intoxication while alcohol is often not used for intoxication, I don't buy that. There are pot smokers who try to get as stoned as they possibly can just about every time they smoke just like there are drinkers who drink to get drunk as skunks. Often these people are one in the same. Most are the young ones still full of wild oats, but some continue this destructive behavior as they grow older, and they tend to pay a price for that. I do not believe that there are a lot of people out there who drink alcohol solely for the taste or solely for medical reasons. I bet in reality you would find that most who claim to do this actually will overdo it a little sometimes, and even if they are only having a couple of glasses of wine with their supper, they're getting a little buzz from that. Alcohol is not the best tasting stuff in the world. Most of us have to develop a taste for it, and I would submit that part of the reason we end up liking the taste is because we know that along with that taste will come at least a mild little buzz, a warming sensation that makes us feel better. When we have a couple of glasses of wine or a couple of beers, we are doing nothing less than altering our perceptions. It makes us feel better. When we drink in social settings, even moderately, we are doing so to enhance the enjoyment of the social gathering. Alcohol lowers our inhibitions. It can make not so funny jokes funny. It can make not so pretty girls look pretty. It can give us a sense of well being. It alters our perceptions and we drink because we like that. A lot of people will deny that that's why they drink, but I say most of them are lying to themselves.

Personally, I don't think it is terribly immoral to drink a little to enhance the enjoyment of social gatherings, or to unwind after work. If done in moderation it won't be that harmful to the person who does it, and if that's what people want to do then it's no skin off my back. I look at pot smoking the same way. A lot of people smoke a little pot. Most do so in moderation. Do they do it for the buzz? Heck yes they do, just as people do with alcohol. I'm not bothered in the least by that as long as these people drinking alcohol and/or smoking pot don't do it in a manner or under circumstances that harm innocent people or put innocent people at undue risk.

[TKDietz]

"Whether the plaintiffs are suing a negligence theory..."

Should say: "Whether the plaintiffs are suing _under_ a negligence theory..."

[SampleMan]

Beyond disagreeing on percentages, we are pretty much in agreement.

I strongly appose certain arguments for legalization because they are the wrong arguments and would open Pandora's box to making everything legal despite its destructive effect on society.

As I said, I've never smoked pot, but I've imbibed in alcohol and still do. I think your summation of it is fairly good except for your assertion that it doesn't taste good. To some it does and to others it doesn't. I love scotch but hate bourbon (same alcohol content). I also have a deep affection for one beer after work. I way 200 pounds, so the buzz effect isn't noticeable to me.

All that said, I think MJ probably isn't that much different from alcohol, or at least much closer to alcohol than crack. Should it be legal? If you can convince the majority, then it will be. I don't think its a right, but a matter of social norms. Social norms change.

I think you are being far wiser than those advocating no controls of any substances for any reasons. Personally, I want to hear more from reasonable people, about how MJ legalization would work and be controlled. Right now I'm a "No" vote, because very few people pushing legalization appear to have given the practicalities much thought.

[GLDNGUN]

hum is that a joke?? who asked for an exemple???

Let me refresh your hazy brain...

"The only thing prohibition has ever done is to create black markets operated by criminals and encourage the corruption of public officials.

It has never, never prevented people from doing what they are going to do."

To that, i challenge everyone to state the opposit!!!

And up your challenge went in, well, a puff of smoke. I'm sure it's easy to forget things you said 5 minutes ago in between bong hits, but coming on to FR with your brain fried is like bringing a butter knife to a gun fight. The more you ramble on, the bigger joke you become. Yes, you're good for laughs, but I'm sure even the sober people who agree with you on legalizing "the herb" cringe every time they read one of your nonsensical posts.

[Know your rights]

Should it be legal? If you can convince the majority, then it will be. I don't think its a right

What are rights? From where do they derive?

those advocating no controls of any substances for any reasons.

Who advocates that? I think the current regulations on alcohol are just about right, and would support equivalent regulation of marijuana.

[SampleMan]

There are plenty of people advocating for legalization of all drugs on the grounds that any action or behavior that does not cause direct and immediate harm to another is a "right".

Their point is not that it should be legalized, but that it is unconstitutional to prohibit it.

I disagree with that notion.

[SampleMan]

Who advocates that?

Here's a little post to me that occured right here on FR just days ago on the subject of legalizing all drugs.

Those who yearn to write 'law' prohibiting sex with goats, marrying their daughters, and smoking crack are free to try, -- if elected. - Granted, in "hundreds of years" far to many have succeeded. We are long overdue for a general housecleaning of these bizarre 'legislators' and their equally weird laws.

Does that clarify what I'm talking about?

[Beckwith]

Each state had its own set of exemptions. As I mentioned in previous posts, the samples I selected were the first few that came up on Google.

You can take it to the bank that beer and distilled spirits were also allowed in small quantities, for "personal use."

As I mentioned, my paternal grandfather ran a speakeasy and my maternal grandfather's personal still was in the attic of my parent's house for many years.

It was made of copper. The main component looked much like a 5 - 10 gallon milk container and there was this coil thingey that came out the top. Never attempted to use it.

What prohibition did accomplish was forcing people to do their drinking at home but it never stopped the consumption of alcohol.

[astoundedlib]

The only thing prohibition has ever done is to create black markets operated by criminals and encourage the corruption of public officials.

It has never, never prevented people from doing what they are going to do."

To that, i challenge everyone to state the opposite!!!

And up your challenge went in, well, a puff of smoke. I'm sure it's easy to forget things you said 5 minutes ago in between bong hits, but coming on to FR with your brain fried is like bringing a butter knife to a gun fight. The more you ramble on, the bigger joke you become. Yes, you're good for laughs, but I'm sure even the sober people who agree with you on legalizing "the herb" cringe every time they read one of your nonsensical posts.


dear sir,

i think it would be more objective to think the previous poster just didn't specify enough...he asked to state the opposite on prohibition of drugs, not prohibition in general, as your example of area 51...but i won't comment on your speculative "comments" about the previous poster, which is only a kid...

[GLDNGUN]

i think it would be more objective to think the previous poster just didn't specify enough...he asked to state the opposite on prohibition of drugs, not prohibition in general

I can take only people at their word. When he says "It has never, never prevented people from doing what they are going to do. To that, i challenge everyone to state the opposite!!!" I understood it to mean that he was saying if someone is determined enough to do something, a "prohibition" against their desire won't stop them. If his argument is that government prohibitions can work except in the case of drugs, I'll let him make the case and respond.

My point is that a prohibition can work under certain conditions. What do you think is the greater urge - people to get drugs or illegal immigrants to get across our Southern border? I'd say it's the latter. If the anti-WOD argument is that a prohibition on drugs won't work because you can't control human behavior, then by all means let's abandon the WOD AND the War On Illegal Immigration. We'll save soooo much money. At least that's the rationale.

[robertpaulsen]

""States Rights" are only good for outlawing things like Sex Toys, but as for MJ, it's Nanny State, Fed Control all the way."

So you're suggesting we ban sex toys at the federal level? That's pretty extreme, doncha think?

[robertpaulsen]

Time savings, yes. Money, no.

Unless marijuana legalization will result in the reduction of the police force (Hah!) or a reduction in prosecutors (Hah!), or judges (Hah!) ... follow me?

That's why the above report is bogus. There are no $ savings.

(Underage marijuana users will continue to be arrested, prosecuted and jailed. Currently, 30% of marijuana users are underage. I expect that number to grow with legalization, maybe as high as 50%. Therefore, you're only solving half the probem.)

[robertpaulsen]

"To that, i challenge everyone to state the opposit!!!"

There's a growing black market for legal cigarettes.

[robertpaulsen]

"If we legalize drugs, the criminals will move onto other markets such as human trafficking and sex slaves."

The criminals will move into the (illegal) drug export business -- unless the drug legalizers on this board believe that all nations will follow our lead and legalize all drugs.

Hey, if you're going to dream, dream big.

[robertpaulsen]

"The only fair question is if the total cost of prohibition exceeds the total net cost of the drug with normal regulation. For alcohol the answer was clearly yes."

The only question? You're saying Prohibition was repealed only because of cost?

[robertpaulsen]

THC = 19.5%?!

Can't be. I've been told THC content hasn't risen at all.

[robertpaulsen]

"It could very well be that Americans are really consuming 10, 20 or more times as much marijuana as the ONDCP consumption estimate reflects."

70 - 140 grams/month? Average?

What does that work out to? 2-5 joints/day, every day, on average?

C'mon.

[Lady Jag]

People tell you different things than they tell everyone else.

[robertpaulsen]

Legalizing only marijuana today would have the same effect on organized crime as legalizing only wine during Prohibition.

None.

[tacticalogic]

Can't be. I've been told THC content hasn't risen at all.

Besides that, if they got a plant that's nearly 20% THC, what's holding it together?