Pubdate: Tue, 14 Apr 2009
Source: AlterNet (US Web)
Copyright: 2009 Independent Media Institute
Website: http://www.alternet.org/
Author: Paul Armentano
Note: Paul Armentano is the Deputy Director of the National 
Organization for the Reform of Marijuana Laws. He is the co-author of 
the forthcoming book, Marijuana is Safer: So Why Are We Driving 
People to Drink? (Chelsea Green, 2009).
Bookmark: http://www.mapinc.org/decrim.htm (Decrim/Legalization)

LEGALIZING POT MAKES LOTS OF CENTS FOR OUR CASH-STARVED GOVERNMENT

What could you do with an extra $14 billion dollars? Members of the 
National Organization for the Reform of Marijuana Laws (NORML) and 
other likeminded organizations will be asking government officials 
that very question on Wednesday, April 15th, when they present a mock 
check to the U.S. Treasury Office.

"We represent the millions of otherwise law-abiding cannabis 
consumers who are ready, willing, vocal and able to contribute needed 
tax revenue to America's struggling economy," says Allen St. Pierre, 
NORML's Executive Director. "All we ask in exchange for our $14 
billion is that our government respects our decision to use marijuana 
privately and responsibly."

But it's not just NORML calling on lawmakers to tax and regulate 
marijuana. In today's economic climate, the question is: who isn't?

Late last month, during President Barack Obama's first-ever Internet 
Town Hall, questions pertaining to whether legalizing marijuana like 
alcohol could help boost the economy received more votes from the 
public than did any other topic. The questions' popularity -- and the 
President's half-hearted reply ("No," he laughed.) -- stimulated a 
torrent of mainstream media attention. In the past two weeks alone, 
commentators like David Sirota (The Nation), Kathleen Parker 
(Washington Post), Paul Jacob (TownHall.com), Clarence Page (Chicago 
Tribune), and Jack Cafferty (CNN) have all expressed sympathy for 
regulating pot. Even Joe Klein at Time Magazine weighed in on the 
issue, writing this month that "legalizing marijuana makes sense."

It makes cents too.

According to a 2005 analysis by Harvard University senior lecturer 
Jeffrey Miron -- and endorsed by over 500 distinguished economists -- 
replacing pot prohibition with a system of taxation and regulation 
similar to that used for alcohol would produce combined savings and 
tax revenues of between $10 billion and $14 billion per year.

A separate economic analysis, conducted by George Mason University 
professor Jon Gettman in 2007, estimates that the total amount of tax 
revenue derived from cannabis could be far higher. According to 
Gettman, the retail value of the total U.S. marijuana market now 
stands at a whopping $113 billion per year. Using standard tax 
percentages obtained from the Office of Management and Budget, he 
calculates that the diversion of this market from the taxable economy 
deprives taxpayers of $31.1 billion annually.

For local and state governments, taxing and regulating pot could help 
reduce growing deficits. For instance, in Oakland, California the 
City Council gave preliminary approval last week to a proposal to 
raise the business tax paid by city-licensed medical marijuana 
dispensary operators. Council members estimate that the new tax will 
raise anywhere from $400,000 to a "couple million" dollars annually.

Likewise, lawmakers in Massachusetts and California are debating 
statewide measures to tax and regulate the production and sale of 
cannabis to adults. Both state proposals would impose a fixed excise 
tax on the retail production of marijuana -- non-retail cultivation 
would remain untaxed -- as well as sales taxes on the commercial sale 
of the drug to anyone 21 years and older.

"The revenue effect of the proposed Act is an estimated annual 
revenue gain of $1.339 billion," says the California State Board of 
Equalization and Taxation, which is backing the measure. A more 
liberal economic assessment performed by California NORML's Dr. Dale 
Gieringer estimates that the annual revenues raised via the advent of 
a legal cannabis industry in California could be far higher.

"A comparable example would be California's wine industry," Gieringer 
wrote in a 2009 report. "With $12.3 billion in retail sales, the wine 
industry generates 309,000 jobs, $10.1 billion in wages, and $2 
billion in tourist expenditures. Extrapolating these figures to a 
legal marijuana market, ... one might expect $12 to $18 billion in 
total economic activity, with 60,000 to 110,000 new jobs created, and 
$2.5 to $3.5 billion in legal wages, which would generate additional 
income and business taxes for the state."

Finally, taxing and regulating cannabis would have the added bonus of 
taking the production and trafficking of pot out of the hands of 
criminal enterprises and, increasingly, drug gangs. According to the 
Associated Press, marijuana is the "biggest source of income" for 
Mexican drug cartels. Legalizing pot would eliminate this primary 
income source for these cartels and, in turn, eliminate much of the 
growing violence and turf battles that currently surround the drug's 
illegal importation from Mexico.

Any way you look at it, legalizing cannabis just makes sense. So why 
aren't we doing it?
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MAP posted-by: Jay Bergstrom