States are losing out on billions of dollars by keeping pot illegal
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The federal government and most states are throwing away $28 billion in yearly tax revenue by not legalizing marijuana, according to a new analysis from the Tax Foundation, an independent think tank.
The bulk of that revenue -- $20.5 billion of it -- would accrue to states through the collection of excise taxes on marijuana sales, general sales taxes, and income and payroll taxes levied on workers and businesses in a mature legal marijuana industry.
The federal government would take in another $7.5 billion, primarily from income and payroll taxes, and $500 million in excise taxes if marijuana were to be taxed the same way tobacco is.
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StartFragmentThese are estimates relying on a certain number of assumptions about the size of the marijuana market ($45 billion in sales annually) and the ways that governments decide to tax the sale of the drug. For instance, if the federal government decided to slap a 10 percent surtax on marijuana sales rather than a tobacco-style per-pound tax, that $500 million excise tax figure would grow to $5.3 billion.EndFragment
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