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Legalizing marijuana cannot save California’s economy with taxation


In a great win for common sense, Californians decided to put the question of legalizing marijuana on the November ballot. If successful, this would make it the first state to legalize marijuana.

The war on drugs is a failure. It created an underground economy that has been detrimental to tax payers as well as those in poor neighborhoods because it created dangerous gangs and drug wars.

Unfortunately, these reasons alone are not enough for some people to support the legalization of marijuana. These proponents bring up one particular reason to legalize marijuana: taxation.

According to a Time magazine article titled “Can Marijuana Help Rescue California’s Economy?” if California were to legalize marijuana, it could solve the state budget deficit problem by taxing the product and gaining revenue for the government. Many young people I have talked to also make the same argument.

Legalizing pot is a good idea. This reason of taxing to save a state’s economy, however, must have been made by someone who was actually smoking pot.

People act as if taxing something creates wealth. Taxing, however, does not create any wealth. It was simply a money transfer from one person to another. If all the guys on campus were forced to give a dollar to all the girls, could you argue the whole campus had an increase in dollars? No, because the girls’ gain was exactly equal to the guys’ loss. The same is true of taxation. Whatever the government gains in revenue, those who bought and sold the marijuana lose.

It is a much different thing to say pot should be legalized because it will increase tax revenue, than it is to say, pot should be legalized to stop tax money from being wasted on a victimless crime. The first, as I explained above, makes no sense. The other, however, creates a world in which we could free-up precious resources, such as police protection, to stop people like murderers and burglars who actually need to be arrested and sent to jail.

Courts and prisons would also be relieved from processing people whose only crime was to put something in their body that they wanted there in the first place. On top of this, those would-be criminals could become employees, inventors or artists because they would not have felony charges hindering their employment opportunities. The result is a gain in the economy for all of us.

If you want to legalize pot, great, but do not justify this position by saying state tax revenue will be increased. Do so because the legalization of marijuana will save the state money, allow people to be safer from drug wars and, most importantly, give Americans the freedom to put into their body whatever they see fit.

Michael Lauck is a junior economics major from Houston.

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