Taxes 101 How Much Could the Government Make Off Pot? Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by Modified Jul 10, 2019 In our third installment in our “Sin Tax” series, we take a look at the potential revenue impacts of regulating and taxing marijuana. The U.S. spends about $12 billion dollars per year prosecuting marijuana offenders, which are 47% of all of all drug arrests, with roughly one-third of all crimes being non-violent and drug related. Additionally, another $150 million is spent per year on policing drugs each year. In the midst of the worst recession since the Great Depression, many have pointed to increased legalization or decriminalization of marijuana as being an untapped resource for taxation, and a source of new small business growth and employment. It is estimated that nearly $1 billion per year could be generated in marijuana production upon nationwide legalization with a flat 10% tax on producers. This, of course, coupled with a significant drop in the cost of policing and prosecuting the use of marijuana could lead to net savings. Embed the above image on your site using the code below: <a href=”http://blog.turbotax.intuit.com/wp-content/uploads/2010/08/tt_pot.png”><img src=”http://blog.turbotax.intuit.com/wp-content/uploads/2010/08/tt_pot.png” alt=”POT-TAX” title=”POT-TAX” width=”630″ height=”1437″ class=”alignnone size-full wp-image-8428″ /></a><br /><a href=”http://www.turbotax.com/”>Free Tax Filing, Efile Taxes, Income Tax Returns</a> – TurboTax.com Written by More from Browse Related Articles Life Listen now: So you want to be rich? Tax Refunds How to Turn Money Into More Money Life Listen now: So you’re buying a home? Family So You’re Living Together? Tax Planning Did You Miss the Tax Deadline? 3 Steps You Can Take Nex… Tax Planning Tomorrow is the Tax Deadline: 7 Things You Need to Know… Self-Employed Do Creators Pay Taxes on Money Earned? Tax Refunds Let’s Have A Real Money Talk Tax Planning Taxes Done? Find Out Which Tax Records You Should Keep TurboTax News Show Us How You #TurboTaxAndRelax for a Chance to Win $… 7 responses to “How Much Could the Government Make Off Pot?” Way cool! Some very valid points! I appreciate you writing this write-up and the rest of the website is also really good. Reply 1st there’s already a ranking system, I highly doubt that will change any time soon. 2nd not only does it cost tax payers money it also takes innocent lives by making it illegal its a big fat Christmas present to drug Cartels and if anyone things they don’t communicate with each other then they don’t know the meaning of the word cartel. 3rd It will only be legal when our government is no longer being bought off by big Pharmasudical companies(sorry for the spelling). If you ask me I believe most people in power wan’t it legal too but if they made marijuana legal then they would loose money and as it is they can use it and not go to prison plus make billions of dollar’s at our expense. I’m surprised that they havn’t out right said we’re profiting on the drug war because it funds itself. Lastly anyone who thinks most of the marijuana we have in the U.S comes from out of the country has been watching too much border wars, the best weed is grown in the U.S so why would consumers seek sources outside the U.S, its the equivilant of saying hey Australlia I don’t like these oranges I grew in my back yard can you send me some Reply It doesn’t matter how much money it’d make, the fact of the matter is that prohibition goes against natural rights, the rights you should have as a human being, and the constitution. The majority of Americans support the legalization of marijuana, and so it should be made legal. The government was not established to tell us what we can or can not do, it was established to enforce the policies that we the people ask for. That is how a democracy is intended to work. Reply Itsnot Important- If you believe that the 1 time costs of implementing a “potalizer” test and setting up regulation for marijuana would outstrip the continuous, daily, hourly taxation of marijuana, you’re a moron. Reply i agree that street price would drop. but how does that really matter ? less tax revenue,where there was none previously. the enforcement,global of usa marijuana policies stops costing joe taxpayer hard earned, better spent elsewhere, dollars. 1000s of mexicans get to live. etc. etc………… Reply Nobody is going to legalize weed outright, instead it will be a controlled substance like alcohol or cigarettes. There are costs in controlling these things as well as benefits. A proper “potalizer” test would need to be made for drivers. There would need to be some sort of THC regulation among dealers and that all costs money too. There are many great reasons to legalize cannabis but making tax money off of it is not one of them. The national debt is many trillions, a few extra billion is a drop in the bucket. Reply The $12B saved in not prosecuting would outstrip any potential tax revenue. Remember the unintended consequence of legalization. With no risk of confiscation or jail time, the street price would drop, as much as 80% by some estimates. Disclaimer – I am not expressing a moral judgment on this topic, just a supply-demand based observation. Reply Leave a Reply Cancel reply
Way cool! Some very valid points! I appreciate you writing this write-up and the rest of the website is also really good. Reply
1st there’s already a ranking system, I highly doubt that will change any time soon. 2nd not only does it cost tax payers money it also takes innocent lives by making it illegal its a big fat Christmas present to drug Cartels and if anyone things they don’t communicate with each other then they don’t know the meaning of the word cartel. 3rd It will only be legal when our government is no longer being bought off by big Pharmasudical companies(sorry for the spelling). If you ask me I believe most people in power wan’t it legal too but if they made marijuana legal then they would loose money and as it is they can use it and not go to prison plus make billions of dollar’s at our expense. I’m surprised that they havn’t out right said we’re profiting on the drug war because it funds itself. Lastly anyone who thinks most of the marijuana we have in the U.S comes from out of the country has been watching too much border wars, the best weed is grown in the U.S so why would consumers seek sources outside the U.S, its the equivilant of saying hey Australlia I don’t like these oranges I grew in my back yard can you send me some Reply
It doesn’t matter how much money it’d make, the fact of the matter is that prohibition goes against natural rights, the rights you should have as a human being, and the constitution. The majority of Americans support the legalization of marijuana, and so it should be made legal. The government was not established to tell us what we can or can not do, it was established to enforce the policies that we the people ask for. That is how a democracy is intended to work. Reply
Itsnot Important- If you believe that the 1 time costs of implementing a “potalizer” test and setting up regulation for marijuana would outstrip the continuous, daily, hourly taxation of marijuana, you’re a moron. Reply
i agree that street price would drop. but how does that really matter ? less tax revenue,where there was none previously. the enforcement,global of usa marijuana policies stops costing joe taxpayer hard earned, better spent elsewhere, dollars. 1000s of mexicans get to live. etc. etc………… Reply
Nobody is going to legalize weed outright, instead it will be a controlled substance like alcohol or cigarettes. There are costs in controlling these things as well as benefits. A proper “potalizer” test would need to be made for drivers. There would need to be some sort of THC regulation among dealers and that all costs money too. There are many great reasons to legalize cannabis but making tax money off of it is not one of them. The national debt is many trillions, a few extra billion is a drop in the bucket. Reply
The $12B saved in not prosecuting would outstrip any potential tax revenue. Remember the unintended consequence of legalization. With no risk of confiscation or jail time, the street price would drop, as much as 80% by some estimates. Disclaimer – I am not expressing a moral judgment on this topic, just a supply-demand based observation. Reply
