With our national debt currently hovering at a mind-melting $19.3 trillion, a new report from the nonprofit Tax Foundation indicates that a fully legalized marijuana industry could potentially generate approximately $28 billion a year.
Generating new revenue for Uncle Sam, individual states, and different municipalities, the traditionally right-wing organization has estimated the dope new revenue would include $7 billion for the feds, $5.5 billion in new business taxes, and another $1.5 billion in payroll and income taxes.
Marijuana Legalization and Taxes: Federal Revenue Impact:
- Marijuana tax collections in Colorado and Washington have exceeded initial estimates.
- A mature marijuana industry could generate up to $28 billion in tax revenues for federal, state, and local governments, including $7 billion in federal revenue: $5.5 billion from business taxes and $1.5 billion from income and payroll taxes.
- A federal tax of $23 per pound of product, similar to the federal tax on tobacco, could generate $500 million per year. Alternatively, a 10 percent sales surtax could generate $5.3 billion per year, with higher tax rates collecting proportionately more.
- The reduction of societal risk in being engaged in the marijuana trade, as well as the inclusion of taxes, will combine to reduce profits (and tax collections) somewhat from an initial level after national legalization.
- Society pays all the costs regardless of legality but tax revenues help offset those costs.
Anticipating a saturation of the fast-growing industry, tax revenues are later forecast to drop to approximately $22 billion annually. According to the report, the overall competition would erode the individual company’s profit margins, resulting in a substantially reduced tax harvest.
Despite all of the gray area that exists between the states and the federal government, America’s current marijuana market rakes in approximately $45 billion per year – based on the legal consumption of marijuana in 24 states plus the District of Columbia – consuming approximately 26,000,000 pounds of pot annually.
Tempting impoverished states to test drive the new industry, the Tax Foundation’s also noted that should all 50 states legalize and tax the peaceful plant, states could conceivably expect to generate between $5 billion and $18 billion per year a new tax revenue.
Currently in the Evergreen State of Washington, marijuana sales are totaling more than $2 million a day and are projected to max out at nearly $270 million per year. Meanwhile in the Centennial State, tax collections for 2016 are anticipated to smoke the $140 million mark, doubling the anticipated $70 million in recreational and medicinal pot taxes originally anticipated.
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If Legalized, Marijuana Could Harvest $28 Billion In New Tax Revenue Annually
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