Jeffrey Miron, a Harvard economist who has modeled and written on the economics of the marijuana market, figures state and federal taxes on cannabis sales add up to $6.7 billion annually.
And he calculates the savings from not having to enforce state and federal marijuana laws — in arrests, prosecution and incarceration — at $12.9 billion a year. Excluding additional expenses, such as the public health cost of marijuana, or the cost of administering the new law, Miron figures that legal pot creates almost a $20 billion bonus. Miron adds, however, that the people who thought the taxation of marijuana would create a windfall for government coffers will be disappointed.
"Compared to the size of most federal government agencies, compared to the tax revenue from things like alcohol and tobacco, and certainly compared to the size of deficits that we have, this is just not a major issue, it is not a panacea, it is not curing any of our significant ills," he says. "There may be good reasons to do it, but the budgetary part is not a crucial reason to do it."
NPR has been all over the marijuana question lately with commentators of all stripes as the "legalize it" crowd has gotten louder during the economic downturn. But, the argument for MJ as an economic panacea is not convincing.