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Pot Prohibition Costs Taxpayers More Than $40 Billion Per Year, Study Says

Thursday, 04 October 2007

Washington, DC: Marijuana prohibition costs US taxpayers nearly $42 billion dollars per year in criminal justice costs and in lost tax revenues, according to an economic analysis released this week.

According to the study, "Lost Taxes and Other Costs of Marijuana Laws," law enforcement spends $10.7 billion annually to arrest and prosecute marijuana offenders. This amount comprises nearly six percent of America’s total criminal justice expenditures.

Pot’s criminalization also artificially raises the plant’s retail price and diverts billions of dollars into the black market economy, the study finds. According to the report, Americans spend some $113 billion dollars annually to consume an estimated 31.1 million pounds of pot. By criminalizing this market, the study estimates that the government loses more than $30 billion per year in tax revenue.

"The market in marijuana in the United States is illicit, illegal, and as such it diverts capital away from the channels of the licit or legal economy, especially the channels from which local, state, and the federal government collect tax revenue," the study concludes. "If [the billions of dollars America’s currently spend on marijuana] were spent on legal commodities … those economic transactions would produce billions in tax revenues for local, state, and the federal government."

According to data released last week by the US Federal Bureau of Investigation (FBI), police arrested a record 829,625 persons for marijuana violations in 2006. Of those arrested, 738,915 Americans (89 percent) were charged with marijuana possession.

Full text of the study is available online at: http://www.drugscience.org.






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