Replacing marijuana prohibition with a system of taxation and regulation similar to that used for alcoholic beverages would produce combined savings and tax revenues of between $10 billion and $14 billion per year, finds a June 2005 report by Dr. Jeffrey Miron, visiting professor of economics at Harvard University.
The report has been endorsed by more than 530 distinguished economists, who have signed an open letter to President Bush and other public officials calling for "an open and honest debate about marijuana prohibition," adding, "We believe such a debate will favor a regime in which marijuana is legal but taxed and regulated like other goods."
Chief among the endorsing economists are three Nobel Laureates in economics: Dr. Milton Friedman of the Hoover Institute, Dr. George Akerlof of the University of California at Berkeley, and Dr. Vernon Smith of George Mason University.
Dr. Miron's paper, "The Budgetary Implications of Marijuana Prohibition," concludes:
-Replacing marijuana prohibition with a system of legal regulation would save approximately $7.7 billion in government expenditures on prohibition enforcement -- $2.4 billion at the federal level and $5.3 billion at the state and local levels.
-Revenue from taxation of marijuana sales would range from $2.4 billion per year if marijuana were taxed like ordinary consumer goods to $6.2 billion if it were taxed like alcohol or tobacco.
These impacts are considerable, according to the Marijuana Policy Project in Washington, D.C. For example, $14 billion in annual combined annual savings and revenues would cover the securing of all "loose nukes" in the former Soviet Union (estimated by former Assistant Secretary of Defense Lawrence Korb at $30 billion) in less than three years. Just one year's savings would cover the full cost of anti-terrorism port security measures required by the Maritime Transportation Security Act of 2002. The Coast Guard has estimated these costs, covering 3,150 port facilities and 9,200 vessels, at $7.3 billion total.
"As Milton Friedman and over 500 economists have now said, it's time for a serious debate about whether marijuana prohibition makes any sense," said Rob Kampia, executive director of the Marijuana Policy Project in Washington, D.C. "We know that prohibition hasn't kept marijuana away from kids, since year after year 85% of high school seniors tell government survey-takers that marijuana is 'easy to get.' Conservatives, especially, are beginning to ask whether we're getting our money's worth or simply throwing away billions of tax dollars that might be used to protect America from real threats like those unsecured Soviet-era nukes."
