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Marijuana legalization would create jobs, government income

BY DI EDITORIAL BOARD | FEBRUARY 17, 2009 7:40 AM

With Iowa’s state government facing a budget shortfall of approximately $600 million and an increasing number of people looking for work, there is an exceedingly practical strategy for economic recovery that very few people are discussing: the legalization, regulation, and taxation of marijuana.

Most politicians have now become accustomed to advocating for the development of green jobs, but almost none of them have yet been willing to consider how a radical change in national and state drug policy could help create some of the greenest jobs imaginable by facilitating the creation of a new marijuana industry. While it is true that such a major change in government policy toward marijuana cultivation, distribution, and consumption would be (extremely) politically difficult to accomplish, it is time for serious people to start considering how to best go about advocating for just such a radical shift.

It is important to keep in mind that even though marijuana is currently illegal, it is still widely available. Rather than preventing people from smoking marijuana, the plant’s prohibition simply raises its black-market price. The riskier the police make it for growers and distributors to meet the substantial consumer demand for pot, the more these underground entrepreneurs charge their customers. However, because of limited law-enforcement resources, the government is only able to drive the price up just so much. And, given the substance’s continuing popularity, the cost at this point is just not prohibitively high. Thus, marijuana producers and consumers continue about their business, inconvenienced but hardly deterred.

The status quo deprives the government of much-need resources in several ways.

First, there is the huge amount of money that local, state, and federal authorities waste attempting to enforce their obviously failed ban on marijuana. Focusing specifically on state and local governments, resources currently allocated to fighting this eternal war against the marijuana market could be rerouted toward much more important programs. For example, Iowa is struggling to find the resources to pay for its programs to assist people who are victims of domestic violence or sexual assaults. Certainly, helping some of the state’s most vulnerable residents recover from such serious crimes should take precedence over going after nonviolent drug users. And in Iowa City, there can be little doubt whether scarce funds would be better spent feeding and housing those who are suffering most from the economic downturn than on hunting down the people who sell weed to college students.

Second, state and local governments could raise substantial new revenues from taxing the sale of marijuana. Because marijuana consumers are already accustomed to paying a large markup as a result of the difficulties of black-market distribution, the tax rate on the substance could be quite high. Currently, all of the money that marijuana smokers pay for their drug of choice ends up in the hands of people who obviously don’t have any problem breaking the law. But if marijuana were legal and simply regulated and taxed as tobacco and alcohol are now, that money would wind up in the hands of ordinary business people instead. Thus, in addition to the funds raised through sales taxes, the government would get more money still when those involved with the marijuana market paid their income taxes.

Some may argue that the societal cost of legalizing marijuana consumption would outweigh any benefits obtained from increased tax revenues, but such arguments are almost always based on misinformation. There simply aren’t any good data to suggest that moderate marijuana consumption is really any worse for people than is using currently legal substances such as tobacco. In any case, a portion of the funds raised from taxing marijuana sales could easily be applied to health-care programs in order to balance out any harm the drug’s use may cause the general population.

Ultimately, people are going to continue smoking marijuana regardless. Continuing on with current drug policy just doesn’t make any sense. So, why not take advantage of that fact and use it to ease the government’s budgetary woes and put a few more people to work?


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