cannabisnews.com: Legalize, Tax Marijuana To Fill Budget Gap





Legalize, Tax Marijuana To Fill Budget Gap
Posted by CN Staff on August 14, 2003 at 07:11:58 PT
By Maureen Brown
Source: Seattle Post-Intelligencer 
As every state faces a budget crisis and our Legislature repeals voter-approved initiatives to fill the budget gap, creative solutions are needed. A lucrative idea yet to be proposed is to legalize and tax marijuana.While seemingly a radical leftist idea, legalizing and taxing marijuana would not only help close the hole in the budget but also provide much-needed jobs and help to farmers. Domestically grown marijuana is the second largest cash crop in the United States, behind only corn. 
The end to marijuana prohibition would merely require the rescheduling of marijuana from a Schedule I to a non-scheduled drug, similar to alcohol, nicotine, caffeine or ibuprofen. Once the federal government had decriminalized marijuana, all states would have the option of legalizing it. States could either be "smoky" or "clear," similar to "wet" and "dry" locales after Prohibition ended in the 1930s. In addition, counties or municipalities could be "clear" jurisdictions if they so chose.A model for how marijuana would be sold and how the taxes would be collected is the state liquor system. Here, liquor may be sold only by the bottle in state-run liquor stores. There is an excise tax on the liquor and a sales tax is charged to all non-industry customers.Similarly, marijuana would only be sold in state-run stores, possibly in current liquor stores. Ordinary customers could pay a variety of taxes on the marijuana bought there, including a federal excise tax, a state excise tax and a sales tax. Customers also would have the option of going to marijuana bars, possibly including current alcohol bars, to buy marijuana to be smoked there.By legalizing this drug, the government would save the money it currently spends fighting the war on marijuana. The federal government spends $19.2 billion every year in fighting the war on drugs; state governments combined spend $77.8 billion every year in this effort. Conservatively estimated, 20 percent of the government's war on drugs expenditures goes toward marijuana. Assuming that Washington state spends one-fiftieth of the states' combined expenditure, this means we spend somewhere around $300 million to fight marijuana. The government could also raise revenues by placing an excise tax on marijuana, much like the excise taxes imposed on alcohol and cigarettes. A federal excise tax of 6 percent on the $11 billion U.S. consumers spend on marijuana every year would produce $660 million for the federal government. Similarly, Washington could impose excise and sales taxes on marijuana. If Washingtonians smoke one-fiftieth of the total marijuana smoked in the United States, we consume $220 million worth of marijuana every year. A 6 percent excise tax would bring in $13.2 million every year for the state. The average state and local sales tax is around 8 percent, which would bring in another $17 million every year.Yet another source of revenue would be from taxing all the income derived from the marijuana industry that currently goes unreported. In a nation with legalized marijuana, many workers would earn income from the marijuana industry, among them agricultural workers, farmers, factory workers, salespeople and CEOs.Assuming that the $11 billion gross sales of marijuana would generate half that much in taxable income, the government could tax an additional $5.5 billion of income. The federal income tax rate varies due to taxable income and deductions, but assuming a 20 percent average tax rate and $5.5 billion in marijuana income, the federal government could collect $1.1 billion in income taxes every year.In addition, the federal government could bring in $382 million in FICA taxes. Forty-one states have an income tax. In states with income taxes, they range from 0.36 percent in Iowa's lowest bracket to 25 percent in Rhode Island's highest bracket. Assuming an average tax rate of 5 percent on income from the marijuana industry, the states combined would bring in $275 million. Washington state does not have a state income tax, so it would not gain any extra revenue when the income from marijuana became taxable.Adding up all the numbers, the federal government would have additional revenues of $6 billion a year and the states an additional $17 billion for a combined total of $23 billion a year. This money could pay for the entire food stamp program, provide a tax rebate of approximately $150 per taxpayer per year or pay for a war with an axis of evil regime. Washington state's portion of the marijuana pie would be $330 million; that might not be enough to solve our next budget crisis, but it is a start.Maureen Brown practices law in Wenatchee.Source: Seattle Post-Intelligencer (WA)Author: Maureen BrownPublished: Thursday, August 14, 2003Copyright: 2003 Seattle Post-IntelligencerContact: editpage seattle-pi.comWebsite: http://www.seattle-pi.com/CannabisNews -- Cannabis Archiveshttp://cannabisnews.com/news/list/cannabis.shtml
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Comment #5 posted by goneposthole on August 14, 2003 at 11:43:14 PT
"the home of the good"
"However, if one considers the tremendous efforts of the official world against us, the ransacking of the Code Penal against us, the slanderous tongues of 'the Democracy of Stupidity,' which has never been able to forgive us for displaying greater intelligence and greater strength of character than it did itself, and the history of all other parties, one must come to the conclusion that in this nineteenth century our party is distinguished above all by its purity."-Karl Marx, the village idiot in "the home of the good"http://www.marxists.org/archive/mehring/works/marx/ch07.htmPuritan haughtiness with a hangup. "There is corruption in anything"-words spoken by Burt Lancanster (probably said before, but I don't know who.)John Ashcroft should read the words of Marx and weep. Another Village Idiot who soars like a Chickenhawk. The other village idiot, Bill Bennett, is too busy smoking a pack of Pall Malls and gambling 8 million bucks down a rat hole. Both are shining examples of moral steadfastness.
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Comment #4 posted by E_Johnson on August 14, 2003 at 09:22:31 PT
Where do people get this idea???????????
The people in this country don't seem to understand anything at all about left wing vs. right wing political ideology.Marijuana legalization has never at any time been an idea of the so-called radical left wing. Marx was an uptight puritan who promoted atheism because he thought of religion as a drug.Marx I am sure would have been a prohibitionist if marijuana had been popular during his day.The right wing in this country has become so hungry for state power that they have twisted all of the meaning out of the words right and left.
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Comment #3 posted by cloud7 on August 14, 2003 at 07:44:21 PT
Re: #1
"Hikers, campers and other outdoor enthusiasts should not have to worry about stumbling upon gardens protected by armed gunmen." He's right - people shouldnt have to worry about this, but because gardening certain plants remains illegal - this situation will only get worse. The obvious solution is to stretch our law enforcement a little thinner to try and catch these "criminals." Of course Im only kidding, legalize it.
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Comment #2 posted by cloud7 on August 14, 2003 at 07:39:45 PT
AMEN
If the economy stays in it's current situation, we win by default! The only thing she didnt mention was that the underworld element is also immediately snuffed out by legalization.
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Comment #1 posted by FoM on August 14, 2003 at 07:37:32 PT
News Article from The AP
Agents Net Millions of Dollars, Thousands of Pot Plants in First Week Wednesday, August 13, 2003 SACRAMENTO (AP) -- A state campaign to eradicate marijuana netted some 80,000 plants worth an estimated $320 million in its first week of major operations, the state attorney general's office said Wednesday. The California Department of Justice's eradication program -- Campaign Against Marijuana Planting or CAMP -- is a joint effort by 70 local, state and federal law enforcement agencies. The campaign began Aug. 4 in the heart of the outdoor growing season. "What is disturbing about these large scale operations is the danger it presents to California's citizens," Attorney General Bill Lockyer said in a statement. "Last year, 56 percent of plants seized were on public lands. Hikers, campers and other outdoor enthusiasts should not have to worry about stumbling upon gardens protected by armed gunmen." In the 20-year history of CAMP, officers have destroyed more than three million pot plants worth about $12 billion, according to law enforcement officials. Last year, CAMP seized 354,164 plants worth more than $1.4 billion. The marijuana growing season begins in mid-April and ends with harvests in late September or early October. "It is important for people to understand these garden tenders are armed and dangerous," CAMP commander Val Jimenez said. Copyright: 2003 Associated Press  
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