Should we tax pot? – Los Angeles Times
Now, as we’re desperately trying to reinvent the economy, should we consider marijuana?

We’ve dipped a toe in those waters already in California. Sales of medical marijuana are taxable — $11.4-million worth for 2005-2006, the most recent (though admittedly murky) figures available.

Marijuana is a huge component of the nation’s underground economy. A couple of years ago, the legalize-it forces estimated that the U.S. marijuana crop was worth $35 billion a year. California’s share of that was $13.8 billion.

If the number is even half that, any tax windfall, on top of money saved by not prosecuting marijuana crimes, would mean a bonanza, wouldn’t it?

Sacramento would be doing the backstroke in black ink. With all the new parks and health clinics, we’d have more ribbon-cuttings than a baby shower. Is this just a pipe dream?

Rosalie Pacula says that in all likelihood, yes. She’s a senior economist at the Rand Corp. and co-director of its drug policy research center. Here’s how she burst my bubble:

First, you have to consider that legalizing it would have its own costs. Recent research, Pacula says, shows marijuana to be more addictive than was thought. Because marijuana is illegal, and because its users often smoke tobacco or use other drugs, teasing out marijuana’s health effects and associated costs is almost impossible. And more people would smoke it regularly if it were legal — Pacula estimates 60% to 70% of the population as opposed to 20% to 30% now — and the social costs would rise.

She takes issue with figures from Harvard’s Jeffrey Miron, among others, who says that billions spent on enforcing marijuana laws could all be saved by legalization. Rand’s research, Pacula says, finds that many marijuana arrests are collateral — say, part of DUI checks or curfew arrests — and many arrestees already have criminal records, meaning they might wind up behind bars for something else even if marijuana were legal.

Legalization also wouldn’t do away with pot-related crime entirely. There would likely be a black market, just as there is in other regulated substances, such as cigarettes and liquor. That means police and prosecution, which cost money.

As to the tax benefit, that’s partly a function of the price point for legalized pot. If everyone could legally grow and consume dope, then the crop probably wouldn’t be worth $35 billion and the taxes wouldn’t be anything to write home about.

How many ways do you think we can debunk Pacula’s premise, which seems to be that arresting 872,721 Americans for marijuana-related offenses and eradicating hundreds of millions of marijuana plants every year is cheaper than not legalizing marijuana?  Did you find all seven?  Read on…

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