Tag: legalization

Tax Revenues from Legal Marijuana Overstated

There are plenty of reasons to legalize marijuana. But one that has received perhaps too much attention is tax revenue. In this Cato Daily Podcast (Subscribe! via iTunes), senior fellow Jeff Miron argues that tax revenue estimates are simply too rosy.

Miron’s 2010 report, The Budgetary Impact of Ending Drug Prohibition, estimates that the overall fiscal impact (including tax revenue) of legalizing marijuana nationwide could be tens of billions of dollars, the revenue boost that legalization supporters trumpet is overstated.

Gary Johnson and Drug Policy

As governor of New Mexico, Gary Johnson succeeded in eliminating New Mexico’s budget deficit, cutting the rate of growth in state government in half, and privatizing half of the state prisons. During Johnson’s term, New Mexico experienced the longest period without a tax increase in the state’s history. He vetoed 750 bills in eight years, more than all other governors combined. The Economist dubbed him “America’s boldest governor” – and that was before he took on drug prohibition. He discussed drug policy and other issues at the Cato Institute November 1, 2010 at a Cato on Campus forum.

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Prop 19, Employment at Will, and Social Peace

Writing at CNN, my colleague Jeffrey Miron puts his finger on one reason for the disappointing defeat of California’s Prop 19:

Prop 19 failed also because it overreached. One feature attempted to protect the “rights” of employees who get fired or disciplined for using marijuana, including a provision that employers could only discipline marijuana use that “actually impairs job performance.” That is a much higher bar than required by current policy.

Like so many other developments in employment law in recent years, this would have chipped away at the basic principle of employment at will, which holds that in the absence of a contract specifying otherwise, either party to an employment relation may end that relation at any time for any reason or for no reason at all.

It was no doubt inevitable that the proposition would fare poorly among self-identified conservatives and older voters. But the “users’ rights” provisions were enough to raise doubts even among liberty-minded thinkers like David Henderson, who predicted that by signaling hostility toward freedom of association, such provisions would “make the drug-legalization hill even steeper.”

Marijuana of course remains illegal under federal law, which means that its consumption would at one and the same time have been 1) protected under employment-discrimination rules, and 2) illegal and subject to prison sentences. If this paradox seems vaguely familiar, maybe it’s because not that many years ago – before the Supreme Court’s 2003 decision in Lawrence v. Texas – there were localities where consenting homosexual conduct was simultaneously protected under one set of laws, and unlawful under another. Indeed, there were more than a few advocacy groups that worked to promote the new controls over employer decisionmaking and yet never troubled themselves to work for repeal of the still-on-the-books anti-gay prohibitions. If the goal is to achieve social peace, however, rather than wage constant culture war on each other, you’d think the “leave people alone” message would hold more appeal than the “fall in line or you’ll hear from our lawyers” message.

Jeffrey Miron surmises, no doubt rightly, that the problem of undislodgeable tenured stoners in the workplace would be more the exception than the rule. Yet it’s worth noting that the issue has already arisen in various lawsuits in which workers with a doctor’s note recommending marijuana use have contested firings. Lawyers have also eagerly cobbled together suits over related issues, as with this class action noted less than two years ago at my other website, Overlawyered:

Starbucks’s job application asked prospective baristas if they’d been convicted of a crime in the past seven years and added for “CALIFORNIA APPLICANTS ONLY”, at the end, that minor marijuana possession convictions more than two years old didn’t have to be disclosed, in accord with a state law along those lines. Entrepreneurial lawyers then tried to steam-press $26 million or so out of the coffee chain on the following theory: that the clarification was placed too far down the application after the original question; that Starbucks had therefore violated the California Labor Code; and that each and every Starbucks job applicant in California since June 2004, perhaps 135,000 persons, was owed $200 in statutory damages regardless of whether they had suffered any harm. Per John Sullivan of the Civil Justice Association of California, the lawyers also took the position that “it didn’t matter that two of the three job applicants who signed on as named plaintiffs testified in court that they read the entire application and knew they didn’t have to mention a marijuana conviction (which neither had anyway!)” The court refused to certify the class and made the following observations (courtesy CJAC blog):

* “There are better ways to filter out impermissible questions on job applications than allowing ‘lawyer bounty hunter’ lawsuits brought on behalf of tens of thousands of unaffected job applicants. Plaintiffs’ strained efforts to use the marijuana reform legislation to recover millions of dollars from Starbucks gives a bizarre new dimension to the every day expressions ‘coffee joint’ and ‘coffee pot.’”… “The civil justice system is not well-served by turning Starbucks into a Daddy Warbucks.”

Ilya Somin at Volokh Conspiracy notes that “the case against the War on Drugs and other ‘morals’ regulations is very similar to the standard conservative critique of economic regulation.” But if a much-needed rollback of morals regulation is made the excuse for an expansion of economic regulation, there may be grounds to wonder whether the goal is truly freedom at all.

President of Mexico Calls for Debate on Legalization of Drugs

For the first time ever, Mexican President Felipe Calderón said yesterday that it was “fundamental” to have a debate on the legalization of drugs. Calderon, from the conservative National Action Party (PAN), had until now been reluctant to pay heed to the growing calls in Mexico and Latin America for a hemispheric debate on drug legalization. Once they left office, two of Calderón’s predecessors—Ernesto Zedillo and Vicente Fox—have also engaged in the debate, calling for the need to legalize drugs as a way to battle the drug violence that is crippling Mexico. Others, such as Jorge Castaneda, former foreign minister of Mexico, have also called for an end to prohibition.

In today’s edition, El Universal newspaper in Mexico City claims [in Spanish] that Calderón’s turn around had something to do with a meeting he had a few days ago with Juan Manuel Santos, president-elect of Colombia. According to the newspaper’s sources, Santos told Calderón that drug trafficking is not under control in Colombian territory and that Mexico should be the country leading a public debate on legalization or decriminalization of drugs.

As I’ve written before, there is a growing consensus within Latin America about the failure of the war on drugs and the need to implement a sensible approach to drug policy. The question remains: Is anyone in Washington paying attention?

Barack Obama’s War on ‘Chooming’

My Washington Examiner column this week begins with a look back at the Disco Era:

In his high school yearbook photo, President Barack Obama sports a white leisure suit and a Travolta-esque collar whose wingspan could put a bystander’s eye out. Hey, it was 1979.

Maybe that explains the rest of young Barry’s yearbook page, with its “still life” featuring a pack of rolling papers and a shout-out to the “Choom gang.” (“Chooming” is Hawaiian slang for smoking pot.)

Survey data suggest some 100 million Americans have tried pot, including political elites and drug war supporters Bill Clinton, Al Gore, Newt Gingrich and Sarah Palin. So the point here isn’t to play “gotcha” by calling the president out on some harmless fun three decades ago. It’s to ask why he isn’t doing more to change a policy that treats people engaged in such activities as criminals.

As I note in the column,

in his new National Drug Control Strategy [.pdf], Obama “firmly opposes the legalization of marijuana or any other illicit drug” and boasts of his administration’s aggressive approach to pot eradication. Watch your back, Choom Gang.

This may present Obama with a serious moral dilemma if and when California votes to legalize recreational use of marijuana this November. (More here in this podcast).

Obama’s ‘New’ Drug Strategy

Ho-hum. Another administration, another “comprehensive plan to combat drug abuse, putting the focus on prevention and treatment strategies.” This one “calls for a 15 percent reduction in youth drug use, a 10 percent decrease in drugged driving, and a 15 percent reduction in overall drug-related deaths by 2015.” It involves more central planning – “ the creation of a community-based national prevention system” – more taxpayers’ money – “an expanded array of intervention-oriented treatment programs” – and more nannyism – “a push to screen patients early for signs of substance abuse, even during routine appointments, and the expansion of prescription-drug monitoring programs.” And don’t forget the ever-popular, ever-futile “more international cooperation in disrupting the flow of drugs and money.” Let’s write down those percentage goals, modest as they are, and see how many of them get accomplished.

As it happens, I had a chance to meet with drug czar Gil Kerlikowske and his top aides last year, as part of a series of outreach meetings as the new team planned its strategy. It doesn’t look like my advice was taken. Of course, I probably didn’t help my case by noting that our last three presidents have acknowledged using illegal drugs, and it is just incomprehensible to me how they can morally justify arresting other people for doing the same thing they did. Do they think that they would have been better off if they had been arrested and incarcerated for their youthful drug use? Do they think the country would have been better off if they had been arrested and incarcerated? If not, how do they justify punishing others?

I then suggested that they pursue the policies recommended by Timothy Lynch and myself in the Cato Handbook for Policymakers:

● repeal the Controlled Substances Act of 1970,

● repeal the federal mandatory minimum sentences and the federal sentencing guidelines,

● direct the administration not to interfere with the implementation of state initiatives that allow for the medical use of marijuana, and

● shut down the Drug Enforcement Administration.

Suspecting that the administration despite being headed a young president who in 2004 had declared the war on drugs an “utter failure” and advocated the decriminalization of marijuana, would not adopt my proposals, I went on to recommend a few mildly ameliorative reforms: stop federal lobbying in state initiative campaigns, stop federal raids on medical marijuana dispensaries and other interference with state policy choices, and stop the Pentagon from giving military equipment to local police forces.

I must admit, though, that the other think tank analysts at the meeting, both liberal and conservative, offered the sorts of proposals for more social workers and more transition programs and more doctors that seem to have ended up in the “new” proposal. Perhaps I should have come up with a couple of proposals that would have cost more money rather than less.

To ‘Control the Border,’ First Reform Immigration Law

The latest catch phrase in the immigration debate is that we must “get control of our borders” before we consider actually changing the current immigration law that has made enforcement so difficult in the first place.

In his Washington Post column yesterday, George Will wrote that “the government’s refusal to control [the U.S.-Mexican] border is why there are an estimated 460,000 illegal immigrants in Arizona and why the nation, sensibly insisting on first things first, resists ‘comprehensive’ immigration reform.”

On the other side of the political spectrum, Democrats in Congress this week unveiled the outlines of an immigration bill that would postpone any broader reforms, such as a new worker visa program or legalization of workers already here, until a series of border security “benchmarks” have been met.

Requiring successful enforcement of the current immigration laws before they can be changed is a non sequitur. It’s like saying, in 1932, that we can’t repeal the nationwide prohibition on alcohol consumption until we’ve drastically reduced the number of moonshine stills and bootleggers. But Prohibition itself created the conditions for the rise of those underground enterprises, and the repeal of Prohibition was necessary before the government could “get control” of its unintended consequences.

Illegal immigration is the Prohibition debate of our day. By essentially barring the legal entry of low-skilled immigrant workers, our own government has created the conditions for an underground labor market, complete with smuggling and day-labor operations. As long as the government maintains this prohibition, illegal immigration will be widespread, and the cost of reducing it, in tax dollars and compromised civil liberties, will be enormous.

We know from experience that expanding opportunities for legal immigration can dramatically reduce incentives for illegal immigration. In the 1950s, the federal government faced widespread illegal immigration across the Mexican border. In response, the government simultaneously beefed up enforcement while greatly expanding the number of workers allowed in the country through the Bracero guest-worker program. The result: Apprehensions at the border dropped by 95 percent. (For documentation, see this excellent 2003 paper by Stuart Anderson, a Cato adjunct scholar and executive director of the National Foundation for American Policy.)

If we want to “get control” of our border with Mexico, the smartest thing we could do would be to allow more workers to enter the United States legally under the umbrella of comprehensive immigration reform. Then we could focus our enforcement resources on a much smaller number of people who for whatever reason are still operating outside the law.