People often ask me: “how much we could save by legalizing drugs?” Well the city of Philadelphia stopped arresting small time marijuana consumers (they fined them and made them take a drug awareness class) and saved over $2 million in prosecution expenses. That does not include the resources that were freed up for protecting property and properly handling court cases in a timely manner. It also doesn’t include lost jobs and time on the job, not to mention the injustice, to the 4,200 victims (83% of whom were African American).
Source link: http://archive.mises.org/17731/cost-of-the-drug-war/
Cost of the Drug War
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Here in California, a plan to “regulate marijuana like wine” is estimated to bring in $1.3B in sales taxes alone (i.e., not counting the savings from law enforcement and court costs).
Because if there’s one thing the people of California need, it’s another tax to pay!
People need to stop cheering for “taxing and regulating” marijuana.
I agree, but you can always grow your own.
And at least they won’t take your house.
Oh, they might.
Or they could send a swat team by mistake and shoot you!
Interesting thought exercise. Currently, marijuana is sold on the black market due to it being a controlled substance. Many pro-marijuana supporters have advocated legalization with the so-called benefit of increased tax revenues. My thought exercise is which government intervention raises costs more: criminalization or taxes?
A black market creates significant excess costs. Premiums are paid to hide the production of goods. Due to the illegal nature of the work, employees must be compensated above their market value. The necessary lack of trust between buyer and seller increases transaction costs. Yet marijuana is easy to grow anywhere. This decreases the cost of criminal production. Dealers and users form social networks lowering the transaction costs. Due to changing societal opinions on marijuana and decreased marijuana prosecution, marijuana’s black market costs may be quite low. They would still be higher than a perfectly free market.
The cost of taxes are somewhat easier to figure out. There is the tax itself which is simple arithmetic. Then, the cost of compliance with state regulations. Transactions costs are much lower. The population might feel safer knowing their drugs are not laced with other drugs.
In most cases, even with the oppressive government, legal business is cheaper than clandestine business. I am curious — especially if government taxes as heavily as predicted — if the black market costs will be lower than the legal costs. If so, even if they legalize marijuana I could see a marijuana black market remaining in place, similar to the cigarette black market in NYC . This would cut into the government’s tax revenues. This could lead to stiffer penalties for violating the state’s decrees (they are hardly laws in the substantive sense). Legalizing marijuana could ultimately lead to significantly higher costs and longer jail sentences. To avoid this, the mantra of legalizing marijuana and heavily taxing it must be put to rest. The case for legalizing marijuana is a moral one, bringing taxes into will only harm marijuana users.
We are allowed to grow our own pumpkins and tomatoes and not taxed for that. I personally have absolutely nothing negative to say about home grown marijuana.
Not long ago, the Global Commission on Drug Policy said that the War on Drugs is a total failure. So why is the US government still spending millions if not billions persecuting non-violent drug users?
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