Marijuana Tax: Will Potheads End The Budget Crisis? [REPORT]

By iScience Times Staff Reporter on March 28, 2013 6:25 PM EDT

marijuana tax
A marijuana tax is being considered by several states now that Washington and Colorado have legalized the recreational use of marijuana. Politicians and economists tend to disagree about how much revenue a marijuana tax will bring in. (Photo: flickr.com / Torben Bjørn Hansen)

A marijuana tax is being eye by several states that are strapped for cash now that government agencies in Colorado and Washington have been crunching numbers about how much money they might possibly raise. Many estimates suggest that a marijuana tax could be a viable and substantial increase to state revenue, and some suggest the marijuana tax revenue could climb into the hundreds of millions.

"I've seen some estimates in the high tens of millions, as much as $100 million for [Colorado]," said Rep. Jared Polis (D-Colo.), according to a Politico article. Rep. Polis is currently pressuring members of congress to consider federal legalization because of the significant revenue that a marijuana tax would bring to several states. Rep. Polis suggests that the money gathered by a marijuana tax would be able to make a "substantial dent in needed school improvements, particularly in poorer districts."

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For years, advocates of marijuana have called for a tax on the drug and full federal legalization. Although many marijuana advocates suggest that recreational marijuana use is a civil liberty issue, others have turned the debate into a medical and economic issue.

In the 2012 election, voters turned out in droves in Washington and Colorado to legalize the recreational use of marijuana. Although the voters were largely in favor of the legalization of marijuana in both states, politicians have remained apprehensive. "The voters have spoken and we have to respect their will," said Gov. John Hickenlooper, who was against the measure, following the release of the voting results. "This will be a complicated process, but we intend to follow through. That said, federal law still says marijuana is an illegal drug, so don't break out the Cheetos or Goldfish too quickly."

Here's exactly what Amendment 64 from Colorado said:

"An amendment to the Colorado constitution concerning marijuana, and, in connection therewith, providing for the regulation of marijuana; permitting a person twenty-one years of age or older to consume or possess limited amounts of marijuana; providing for the licensing of cultivation facilities, product manufacturing facilities, testing facilities, and retail stores; permitting local governments to regulate or prohibit such facilities; requiring the general assembly to enact an excise tax to be levied upon wholesale sales of marijuana; requiring that the first $40 million in revenue raised annually by such tax be credited to the public school capital construction assistance fund; and requiring the general assembly to enact legislation governing the cultivation, processing, and sale of industrial hemp."

Although Colorado will eventually begin taxing marijuana dispensaries, the Drug Enforcement Agency, a federal agency created to fight the drug war, will continue to disrupt and incarcerate individuals involved in marijuana sale and use. DEA spokesperson Paul Roach said that the DEA didn't have a position on the amendment in a Colorado Independent report. Roach said the DEA will continue to enforce federal drug laws and added, "We don't see that changing."

President Obama has recognized the voting results in Colorado and Washington, and he respect the decision. "We've got bigger fish to fry," Obama said in an interview with ABC News. "It would not make sense for us to see a top priority as going after recreational users in states that have determined that it's legal," he added.

Although many people are already supporting the civil liberty aspect of the legalization of marijuana, not everyone is excepting the economic fallout of passing that type of amendment. This is not a cash cow that can solve anyone's fiscal problems," said Harvard economics professor Jeffrey Miron in a Politico report. Miron, it should be noted, is a pro-legalization scholar. "There is a lot of exaggeration about how big the revenue can be," he said. Though the politicians and economists tend to largely disagree with how much money can be made from a marijuana tax, the voters of Washington and Colorado clearly agree on one thing: Adults smoking in the privacy of their own home are not a threat to anyone and should not be imprisoned. Whether potheads can save the state budgets, however, remains to be determined.

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