Tax revenues and marujuana

May 17, 2009

Tax revenues & marijuana
Robert Downes 5/18/09
Legalizing marijuana to raise state tax revenues is one of those “In Case of Emergency, Break Glass“ sort of measures brought on by desperate times.
In California, they‘re thinking of breaking the glass on that taboo, and it makes you wonder: should Michigan break it too?
And should we get there first, before California captures a market worth billions?
Gov. Arnold Schwarzenegger says it‘s time to debate legalizing the evil weed in California, which has a $42 billion gap in its budget. A California lawmaker has also introduced a bill that would legalize and tax marijuana.
Why? Because pot is California’s biggest cash crop. Growers raise an estimated $14 billion of it each year, none of which is taxed. It’s estimated that California could raise $1.3 billion per year in tax revenues by simply legalizing its biggest crop.
But the mind reels in comparison to what marijuana could do for tourism in California. Who knows how many billions will flood into the first state to legalize pot?
Currently, 56 percent of Californians favor legalizing marijuana. (By comparison, only 12 percent of Americans favored legalization in 1969.) Some feel that legalization could defuse the drug war in Mexico once heavily-armed gangsters see their market evaporate.
Marijuana is, in fact, the biggest cash crop in America. In 2006, ABC News reported that the U.S. marijuana crop is valued at $35.8 billion per year, ahead of corn ($23.3 billion) and wheat ($7.5 billion).
Meanwhile, we’re being taxed to support a wild goose chase to maintain the official fantasy that government and law enforcement can stop people from smoking weed.
So who’s really high here? Who’s suffering from hallucinations and fantasies?
Fortunately, Michigan is in better shape than California. Our expected budget shortfall for the coming year is ‘only‘ $2 billion.
But there‘s an urgency to changing Michigan‘s direction. According to economist David Littmann of the Mackinac Center for Public Policy, unemployment in Michigan may hit 17-20 percent by the end of the year, and tax revenues from the auto industry will drop from supporting 26-30 percent of the state‘s budget to 10-12 percent.
Something has to replace Michigan‘s lost tax revenues, and fast.
If it‘s true that attitudes are changing in regard to marijuana, then common sense would indicate that Michigan should strive to legalize the crop and gain the benefits of tourism, farming and tax revenues before some other state jumps the gun.
Speaking of taboos, consider the example of gay marriage which is rapidly becoming accepted in America. Last week, Maine became the fifth state to legalize same-sex marriage.
But it‘s Vermont that is reaping the benefits because unlike other states which have made same-sex unions legal, you don’t have to live in the Green Mountain State to get married there.
It’s estimated that more than 8,000 gay and lesbian couples will flock to Vermont this year to get married, bringing $30 million and 700 new jobs to the state over the next three years related to hotel stays, wedding receptions, meals and airfares. This bonanza will be compounded by all of the relatives and friends who will tag along to see Joe & Jim finally tie the knot.
Like gay marriage, marijuana is another cat that‘s out of the bag and heading for mainstream America. Former pot smokers include the likes of presidents George W. Bush, Bill Clinton and Barack Obama; billionaire New York City Mayor Michael Bloomberg; and former vice president Al Gore.
Legalizing marijuana would give tourism and agriculture a stellar boost in Michigan. It would also help put organized crime out of business by licensing and regulating a product that is already widely used.
You get the picture. Michigan doesn’t have to be the whipping boy of America, playing sad sack on the national airwaves every night with Jay Leno passing around the cryin’ towel. Simple marketing, foresight, and a shot of courage in Lansing could turn our state around on issues whose time has come.
And spare the moralizing. Consider that gambling was considered immoral, dangerous and illegal everywhere in America but Las Vegas until the mid-1970s.
Yet today, gamblers and casinos are pillars of the community, and the lottery supports Michigan schools. Even America’s moralist-in-chief, William Bennett, is a sucker for the gaming tables.
What’s immoral is missing lost opportunities and letting our state go to hell. What’s immoral is firing state troopers, teachers, and downsizing Medicaid, the arts, education and our environment because we don’t have the political will to recognize that the world is changing and it’s time for Michigan to change too. In the crisis we‘re facing, no topic should be “off limits.“
At the very least, there should be a study conducted as to the value of a potential marijuana crop in Michigan and how much tax revenue and tourism it would generate.