An independent think tank called The Tax Foundation recently conducted a study to assess how much tax revenue the federal government and states are losing from not legalizing marijuana. They estimated that roughly $28 billion in tax revenue is being missed out on. Approximately $7 billion of it would go to the federal government and the remainder to the states.
The potential tax revenue received by the government from legalized marijuana would primarily be from business and payroll taxes and some from excise taxes, according to The Washington Post. The idea would be to tax marijuana in a similar way to tobacco products.
The government can actually capitalize on production by taxing each pound of marijuana produced, which is similar to the per-pound tax on tobacco products. A 10 percent sales surtax could generate $5.3 billion with proper guidelines in place.
Some are concerned that marijuana legalization would create social difficulties. They expect abuse and use of the plant to increase. They expect addiction to take place. The fact of the matter is, regardless of its legal status, a vast amount of Americans are using marijuana daily. The costs of prohibition are to the tune of several billion dollars per year. Legalization would bring billions of dollars in tax revenues to organizations that need them for mental health, education, crime prevention and more.