State assemblyman Tom Ammiano made his pitch in February, a bill that would legalize the "cultivation, possession and sale of marijuana by people 21 and older." The bill would amount to about $50 per ounce tax on the drug, raising an estimated $1.3 billion for the state.
Are Californians cheering? Plenty are not, but my gut response to the What about our children!? argument is They might like legal pot too! Writing at Slate, Jeremy Singer-Vine says the state that led the push for legalizing medical marijuana has plenty of reasons to be the first to go all the way:
What of the economics? Legalizing and taxing a product that's enjoyed a black market estimated at around $14 billion in the state is a ballsy move, and one not likely to please all buyers, sellers and government coffers simultaneously. Singer-Vine relays some words of wisdom from pot proponent Jeffrey Miron of Harvard. He says that in order to keep from setting a too-high premium on the drug (which would simply encourage current buyers to keep their buying and selling in the black market) the ideal tax would start small -- say, 25 percent -- and grow as the government sees fit.In April, a poll found that 56 percent of Californians supported the idea. In May, Gov. Arnold Schwarzenegger said it was "time for debate" about legalizing and taxing marijuana. Other states facing similar fiscal woes, such as Illinois, are considering proposals that would legalize and tax either medical or all marijuana.
There are also all the familiar, but no less impactful, pot defenses. Law enforecement against marijuana, a cost which Miron has placed in the billions nationally, would be nixed. Andrew Sullivan has been a determined warrior on the pot front, and of all his arguments I find this the most convincing: It's terribly difficult to peg deaths to marijuana use, which seems to call into question the rationality (or at least the cost) of all this law enforcement in the first place. And as you know, while I've trumpeted for sin taxes before, but I'm especially sympathetic to sin taxes on marijuana precisely because, as opposed than raising the price of my beer, a marijuana tax involves the expansion of legal civil liberties rather than merely the expansion of government attempts to make money. At a time of fiscal crisis, it's something I hope Arnold keeps his eye on. Oh, and for those uncomfortable with the expansion of legal marijuana beyond medicinal purposes, think of it this way: In California, the budget needs some medicine, too.
Update: The LA city council just closed a legal loophole that had allowed the rapid proliferation of medical marijuana stores in the city.
Damn update, was going to say everyone I know in LA has their medical mary jane "card."
Also, 100% in agreement with the expansion of civil liberties vs. beer tax point. I might have missed it, but you should also consider that if Marijuana is legalized (to whatever degree) and taxed, it will likely also be regulated, perhaps severely so. I'd imagine any expense reduction in law enforcement would be more than offset by the increased cost of regulation on that end. But, I think it still makes sense to legalize weed. Seriously, you can get it anywhere already, Gov't is just shooting itself in the foot by not gettin' its cut of the action.
I'd be very surprised if the Federal government allowed California to legalize pot. There would be all the arguments about encouraging drug use, and export of the stuff to other states. Or people driving into California to get it (there's a benefit you didn't mention -- increase in tourism!)
And of course, if the sky doesn't fall, it puts a lot of drug warriors out of business.
So I doubt it will happen. Good idea though. 25% is a punitive tax in my opinion, but I'm not in favor of sin taxes.
I'd prefer bureaucratic regulation of the marijuana trade over the gangs and thugs that have a hand in it now. Complete legalization (with reasonable regulation and reasonable taxation) would do so much to cripple the illegal drug traders, clear out the jailhouses of non-violent offenders, save state funds on prosecutions AND raise revenue that it is really insane not to do it. BTW, good old Mary Jane is the only thing that keeps my herniated discs from driving me nuts. And yes I have a good job and contribute to society etc. etc.
How viable is it to tax something you can grow in your basement (with the right lights)? How much savings will you get from law enforcement if you're going to aggressively enforce taxation on it?
I'm all for legalizing pot on the libertarian and anti-violence aspects, but I'd rather not people expect it to be a cash cow.
"How viable is it to tax something you can grow in your basement (with the right lights)?"
You can put a still in your basement and make your own whiskey illegally). You can legally brew your own beer - but most people don't. You can legally grow, dry, and process your own tobacco.
My guess is that most pot will be bought by people who don't wan't to mess with the infrastructure and upkeep...just like tomatoes.
From a libertarian perspective, California should legalize pot. They should also legalize prostitution. I'm OK with the sin tax. It isn't a libertarian approach but I prefer consumption taxes to income taxes.
If California is first to legalize pot, it could also take the lead in pot growing/processing/education/infrastructure.
This would help reduce crime in Mexico and would free up law enforcement to focus on bigger problems.
Re: Raising an estimated $1.3 billion in tax revenue for CA -- I would like to understand the assumptions around this revenue projection. I want to konw to what degree it assumes the market will expand once pot is legal. Many friends, including myself, would like nothing better than to be able to go to the local Walgreens and buy a couple joints. We abstain from pot because it's illegal right now. With legalization, I think the market would expand considerably. I think the tax revenue could well be higher and comparative to wine/beer/spirits.