In a report released today, Dr. Jeffrey Miron, visiting professor of economics at Harvard University, estimates that 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.

In response, a group of more than 500 distinguished economists — led by Nobel Prize-winner Dr. Milton Friedman — released 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.”

Using data from a variety of federal and state government sources, 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.

More here.

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