California Starting To Think Creatively

TW: I doubt most Republicans anti-tax freaks in California were jonesing for the legalization of drugs (am sure a few libertarian ones would be exceptions) but that is where things are moving in CA. I have pounded the table on this one before but somewhat surprisingly it is starting to seep into MSM in a much more overt way than it has before. This piece puts some actual numbers down on paper. They are large, perhaps $10 billion a year of tax revenues. Over a ten year period you are talking $100 billion in taxes and a similar amount in avoided interdiction costs. And those are the impacts related solely to pot, which is where I would leave things to start at least.

From Int'l Herald Tribune:
"Want to help fund the bank bailout, ease the California budget crisis and shore up strained U.S. finances? Legalize drugs, tax the trade and save on interdiction, domestic enforcement and the prison and court system...

...[the Governator]... has an offer from a group call Let Us Pay Taxes, which claims to represent the marijuana industry and is willing to pay $1 billion annually in taxes if only he would legalize. No doubt they are low-balling. The United Nations estimates the value of the U.S. cannabis market at $64 billion annually, while a paper by Jonathan Caulkins and Peter Renter calculates that about half of the costs of drugs are in one way or another attributable to factors linked to interdiction and its perils.

But even if you cut the UN number in half and tax it at only 50 percent, a lower tax than many states and localities put on tobacco, you would still get more than $15 billion nationwide. If California consumes its 13 percent share, in line with GDP, and I am betting it does, you are looking at something on the order of $2 billion, even before you take account of lower costs.
The Harvard economics professor Jeffrey Miron has a lower estimate, at $7.7 billion annually in lower spending nationally and $6.2 billion in extra revenues.

...Cheaper legal drugs might lead to a spike in use, which might hit productivity and impose many costs, like higher health and other welfare costs.

All of those prison, military and law enforcement jobs are a huge source of stimulus, and the cutbacks implied by legalization would raise transitional problems.

Moreover, drug legalization, just as for alcohol, is essentially a moral and political decision about which reasonable people can disagree. It is also, to put it mildly, not very likely.

Still the war on drugs rolls on, costing billions, creating huge incentives for violence and crime, imprisoning hundreds of thousands and seemingly never much closer to victory."
http://www.iht.com/articles/2009/02/24/business/col25.1-436575.php