EP. 52 The pros and cons of drug legalization in the U.S. - a podcast by The Hollywood & China Doll Evening Show

Drug legalization could reduce government costs and raise tax revenues, but opponents worry over health and social ills

State governments facing massive fiscal deficits might consider a rather unusual way to alleviate those debts – through the legalization of drugs like marijuana and thereby ending the costly drug war.

In a study for the Cato Institute, Jeffrey A. Miron, senior lecturer on economics at Harvard University and a senior fellow at Cato, and Katherine Waldock, professor of economics at New York University, estimate that legalizing drugs would save the government approximately $41.3 billion annually on expenditures related to the enforcement of prohibition.

Of those savings, $25.7 billion would accrue to state and local governments, while $15.6 billion would accrue to the federal government.

Miron and Waldock estimate that of that $41.3 billion in savings, about $8.7 billion would result from the legalization of marijuana alone and $32.6 billion from the legalization of other drugs, like cocaine and heroin.

Just as important, drug legalization would translate into higher tax revenues generated by the sale of these newly-legalized products in the open commercial marketplace.

Drug legalization would yield tax revenues of $46.7 billion annually, assuming legal drugs were taxed at rates comparable to those on alcohol and tobacco, they said. Approximately $8.7 billion of this revenue would result from the legalization of marijuana, $32.6 billion from legalization of cocaine and heroin, and $5.5 billion from legalization of all other drugs.

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