Research Outline: Marijuana Tax Revenue

Research Outline

1. Introduction Paragraph:

Point of flaws of the current prohibition system

Thesis: Taxing marijuana holds economic benefits

2. Body Paragraph:

Legalization of marijuana would reduce spending on enforcement of prohibition

Legalizing drugs would roughly save about 41.3 billion dollars per year in government expenditure

Saves prosecutorial, judicial, and incarceration expenses

Reduces arrests for drug trafficking and possession

8.7 billion of the 41.3 billion in savings would result just from legalizing marijuana alone

3. Body Paragraph:

Marijuana can be an important source of tax revenue

Tax revenue for marijuana can be estimated by examining the current revenue that is collected from tobacco and alcohol industries

American consumers of marijuana range from 25 million to 60 million people

Total marijuana spending by consumers currently ranges from 45 billion to 100 billion a year

According to Canada, the cost of producing about one gram of marijuana is about 33 cents, and current marijuana consumers in the United States pay about $10 per gram

If the cost of retailing and distribution for marijuana is the same as it is for legal tobacco cigarettes (10 cents a gram), then selling the legal product for the same price as the current street price ($10 per gram), 40 billion to 100 billion could be generated in new revenue

Legalizing marijuana would just transfer all of the current revenue from the black market to a regulated legal market

4. Body Paragraph:

Current taxes collected from medical marijuana dispensaries are helping cities repair their suffering economies

Oakland California collected 1.4 million in 2011 taxes from medical marijuana dispensaries, which made up almost 3% of all the business taxes collected by the city

Oakland is planning to double the number of dispensaries it licenses in hope of collecting even more revenue

Colorado Springs collected over 700,000 thousand in 2011 taxes from the medical marijuana industry

Money was so tight in 2010, the city had to shut off a third of its streetlights to save 1.2 million dollars

Denver collected over 3.4 million in 2011 from sales tax, application and license fees

The state of Colorado collected $5 million in 2011 sales tax from medical marijuana businesses, which is twice as much than was collected the year before

Maine taxes medical marijuana at 5% unless it is baked into brownies, which then is subject to the 7% tax of prepared foods

Oregon doubled the fee to join the state’s medical-marijuana program to $200 dollars a year to help raise $6.7 million a year for other health programs

Earned income by producers would be subject to standard income taxes

5. Conclusion Paragraph: