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Friday, March 24, 2017

A Fiscal Argument Against Legalized Pot

Thank you to the reader who sent a link to the Focus on the Family article!
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I had planned to finish the week with the economic analysis of Obamacare reform, but since Republicans in Congress continue to do what they do best - fight each other - we will just have to wait with that one. 

Therefore, let me get to another topic that is of rising importance here in Wyoming. Matt Kaufman over at Focus on the Family explains:
On Election Night last November, much of the country went to pot. Voters in California, Maine, Massachusetts and Nevada passed proposals to legalize recreational marijuana, bringing to eight the total number of states to do so (joining Alaska, Colorado, Oregon and Washington). Florida, Arkansas, Montana and North Dakota did the same for purportedly medical purposes. All this, with polls showing rising national support for legalized marijuana—57 percent, in an October 2016 Pew Research survey—left pro-pot backers feeling high. “This is the most important moment in the history of the marijuana-legalization movement,” crowed Tom Angell, founder of the group Marijuana Majority.
Last year there was a ballot initiative by pot protagonists here in Wyoming. Its failure, however, should not be chalked up to some overwhelming resistance to the idea here in our state. It was more a matter of political incompetence on behalf of the ballot initiators. This is important, because we have certainly not seen the last of this issue here. 

As a libertarian, I sometimes get questions about pot legalization. There is widespread support for it among libertarians in general, and the argument is almost always that the principle of individual freedom demands that people be allowed to use drugs at their own discretion. I respect that argument; my main interest in this issue has to do with its place in the context of a big welfare state. Before I get there, though, let me offer an equally principled counter-argument to the point about individual freedom. If a person voluntarily takes a drug that inhibits his ability to function as an independently thinking member of society; if his ability to provide for himself is harmed and his ability to contribute to the peace and security of his community dissipate as a result of his drug use; then is he still deserving of the same protection of his freedom as his fellow citizens who do not use such drugs?

This is a question that I have not yet answered myself - I am just throwing it out there for protagonists and opponents of legalized marijuana to discuss. I will be more than happy to listen to the arguments. 

Meanwhile, my main issue with pot legalization is, again, that it enters into the context of a welfare state. There are two sides to this issue, the first having to do with taxes. Legalization has been sold to voters and state legislators, for example in Washington and Colorado, as a new revenue source. In Colorado, total taxes, licenses and fees on marijuana now bring in $17-18 million a month in government revenue. The marijuana sales tax in Washington, which has been up and running since July 2016, pulls in an estimated $4.5 million per month. 

Annually, these numbers come out to $306 million in Colorado and a bit over $50 million in Washington. Compared to total government revenue,, these numbers are not impressive; state spending alone (not counting local governments) is $36 billion in Colorado and $40 billion in the Evergreen State. Nevertheless, tax revenue is a selling point for legalization, and we need to recognize that it will be made in Wyoming as well; if we import the Colorado revenue figure and adjust it for population, it would come out to some $35 million in Wyoming. That is, if we imported their tax model and if usage would be at the same levels as in Colorado. 

In a state where legislators introduced more than a dozen separate tax-increase bills in the 2017 session, $35 million is not peanuts. Do not expect the comparatively small number to deter statist legislators from supporting legalization. Furthermore, the trend in Colorado pot-tax collections is strongly upward: monthly revenue has almost tripled in two short years. 

Aside the social and individual-freedom sides to this issue, the problem with collecting taxes on a product such as marijuana is that it makes government services dependent on addictive behavior. In order to keep some of its functions going, government relies on the willingness of some of its citizens to acquire an addiction.

This is, plain and simple, immoral. Taxes on alcohol, tobacco, gambling and other addictive products are used for supposedly virtuous purposes, where government - in its benevolence - provides education, health care, welfare checks and other things that purportedly makes life better for us all.

Even if we accept the false premise that government is better than the private sector at catering to our needs, its reliance on addiction taxes to pay for even some of those services quickly erodes the moral virtue of whatever government is paying for with those taxes. An alcohol tax to pay for, say, college education (yes, that has been proposed, though to the best of my knowledge not in Wyoming) is a message to the drunk who can't hold down a job because he drinks that he is as virtuous a provider for his children's future as his wife who works two jobs to compensate for his lack of manhood. 

A pot tax send a similar message: turn on, tune in, drop out and keep smoking, and you will be as productive a contributor to society as the guy who works 12-hour shifts, trying to build a business or a professional career so his income can give his children a better life than he has. 

Then, there is the other side of the pot-tax issue, namely what we do with those who smoke so much that they cannot keep a job. Do we put them on welfare? Do we, by legalizing marijuana, accept that the population incapable of functioning in society due to addictions, should grow - and with that acceptance, do we also accept to expand the cost of welfare and other entitlements? After all, the pot smokers, like the alcoholics, pay taxes by means of feeding their addictions. Does not that compensate for some of their welfare consumption? 

Of course, there are people who consume alcohol without being dysfunctional in society. I, too, enjoy a beer or two every now and then. By the same token, some pot smokers continue to function on their jobs and in society in general, using the product only recreationally. But it is still a fact that both alcohol and pot are addictive products - add tobacco to the list - and that addictive behavior is destructive in terms of health and individual independence. My fiscal argument against legalization of marijuana is related to that particular characteristic of the product: it is simply not moral to fund government upon the backs of people with destructive addictions. Likewise, it is immoral to legalize a product that will allow more people to become dependent on tax-funded welfare programs.

On one point, though, I will give the marijuana reform movement a big approval: the legal consequences for those who sell and use pot should not be anywhere near comparable to the legal consequences for rapists, murderers and other violent criminals. But that is a separate issue, beyond my purview.

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