Causal Argument // Legalizing Marijuana – Essay Example

Stand For Legalizing Marijuana Government Taxation In the US, it is estimated that 10 million Americans regularly use marijuana, while another 20 million occasionally use it, which if taxed could easily result to potential tax revenue of anywhere from US $3 to 9 billion at 1991 price levels (Schwer, et al. 2002). Recent studies found that in California alone, more than 20 million pot plants are presently grown, valued at $14 billion. This comprises the crop grown legally for medicinal purposes, and distributed to the 200,000 physician-certified users statewide. These legal pot sales generate $100 million in state tax revenue every year, which is no small boon for cash-strapped California (Green, 2009).
A report prepared by Stephen T. Easton (2004) on the legalization of marijuana for Canada estimates that tax on the present (illicit) level of production of marijuana, the government would recognize an additional tax revenue of $2 billion on the Canadian sales alone, additionally for export tax. At the time the US chalked up a 27 billion dollar trade deficit, it did not include the 2.5 billion dollars exported for pot (Galbraith, 2001). This means that the sales tax revenue estimate of about US $3 to 9 billion could go higher with the inclusion of export tax.
Rebuttal: Points against this line of thinking –
1. Any economic advantage taken from the legalization of marijuana remains to be an immoral gain because of the immorality of “pushing” marijuana. It is still a substance that is prone to abuse and may lead to the use of more harmful narcotics.
2. Computations based on present street prices is overstated because they are based on artificially high black market prices. If marijuana were to be legalized, street prices would go down, and taxes on profits will be much lower than presently estimated. This is attributed to the “risk premium” associated with prohibition (Sullum, 2006).
3. Whatever the state/nation will make in tax revenues will cost society more based on the possible increased incidence of marijuana and drug use among the youth. Just as the use of alcohol among minors has been nearly impossible to regulate, given that alcohol is commonly present in many homes, it is possible that the conspicuous consumption of marijuana could escalate the use of the narcotic by the underaged, creating a more severe social problem that the state will have to address with funding.
Easton, S T 2004 ‘Marijuana Growth in British Columbia’, Public Policy Sources, number 74, Fraser Institute. Accessed 16 April 2010
Galbraith, G 2001 ‘The Economic Necessity of Marijuana’, Business & Society Review, Issue 27
Green, J 2009 ‘Canabusiness: Assembling a Hydro Hut, Buying a Gun Safe, Cleaning Up After Neighborhood Dogs – The ABC’s of Opening a Pot Franchise’, The Atlantic, April 2009, vol. 303, issue 3, p. 23
Schwer, R K; Riddel, M; & Henderson, J 2002 Fiscal Impact of Question 9: Potential State-Revenue Implications, The Center for Business and Economic Research, University of Nevada, Las Vegas. Accessed 16 April 2010
Sullum J 2006 Would Legal Marijuana Mean an Excise Tax Bonanza?, Accessed 16 April 2010