The Economic Case for Legalizing Marijuana

Marijuana is not only able to be used as a medication, but it is also able to boost the economy. According to a study in 2006, conducted by the Cato Institute, legalizing marijuana would result in $8.7 billion in tax revenue for both states and the federal government. This amount of money can help school districts, impoverished neighborhoods and other areas that America needs help with. Researchers on the subject of the economics of marijuana base their studies off of the assumption that marijuana will be taxed the same way that alcohol and tobacco are taxed. Researchers also assume that marijuana growers will have to pay both income and a sales tax for their product.

(Photo courtesy of the weed blog) Legalizing marijuana would result in tax revenue through sales and income taxes.
(Photo courtesy of the weed blog) Legalizing marijuana would result in tax revenue through sales and income taxes.

Marijuana will not only benefit the economy through tax revenue, but it will save states billions of dollars that are spent on regulating marijuana. According to a 2007 study, $1billion is spent annually by U.S. prisons just on inmates incarcerated for marijuana related crimes. If marijuana was legalized nationally that would be $1 billion less the government has to spend which would lead to money that the U.S. could put into more constructive things such as schools instead of prisons. In another 2007 study, Forbes reported that tax payers spend $41.8 billion annually because of the marijuana prohibition in the U.S. This is a great amount of money that is spent annually just to keep a natural plant illegal. As a tax payer, it enrages me to know that my hard earned tax money is spent on keeping marijuana illegal, while legalizing marijuana would release people from prison and brings tax revenue through sales and income taxes.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s