Monday, February 09, 2009

Not a new idea, but a good idea. Legalize and tax marijuana.
Okay, we have the numbers. C=20,000,000 oz a month. P(i)=$160. P(l)=$60. Which means S=$2 billion dollars a month.

And tax revenue is even easier. If we take my proposed $10 per ounce tax for both federal and local, this would raise $2,500,000,000 a year for the national treasury and the same for the state treasuries, without including sales or income taxes, tariffs, license fees, etc. Not enough to balance the budget, but still 'real money.'

Of course my example is unrealistic in one way. Federal legalization is possible, and long overdue. I would not be surprised to see it as soon as this summer. But this would leave state options, and, at first, many states would not legalize it. And while it is likely that there would be some drop in prices in these states because dealers would be in competition with legal sellers in neighboring states, these states would not get the full stimulus effect or any tax revenue at all.
I think Prup is being way optimistic when he says marijuana will be legal in the summer.

No comments: