Wednesday, September 19, 2012
States Try Fiscal Drag on Pot
Several western states are debating "how much tax money recreational marijuana laws could produce."
Weepin' Buddha on a recline! There may be solid reasons for states to legalize marijuana, but generating tax-revenue is NOT one of them. State taxes do not "produce" currency, they only redirect currency from private use to publicly targeted use. No net change in net financial assets, no net change in local incomes or population capabilities.
Look, the bottom line is mobilizing the capabilities of a local population. Why not institute a state tax that requires people to acquire "time-bank" hours? Better yet, allow people to pay some of their existing state taxes with those time-bank hours. That way people could get together and propose useful projects where group A[i-j] could do something for members of group B[k-m], who would in turn provide a service that members of group A desired. That approach would actually "produce" a return on coordination, by encouraging people with otherwise idle or spare time to find locally useful things to do. Various forms of drug use by bored citizens might even decrease.
Instead, "pro-pot campaigners say it could prove a windfall for cash-strapped states with new taxes on pot and reduced criminal justice costs."
What part of sector flows don't these people understand? Unless out of state buyers flock in (redistributing currency from other states), all this will do is recycle existing currency assets in-state, and also remove additional aggregate demand, by increasing net taxes.
Their argument might be that significant pot-profits are smuggled out of state, and eventually to Wall St, but the variability, per state, of those assumptions are not even being accurately examined yet in this debate.
Spiraling down through a haze of smoke-tax, man! Like, whatever.
If any good comes from these efforts, it'll be entirely indirect, through reduced crime and other current intangibles.
On the plus side, if they stop spending so many resources prosecuting pot-smokers, maybe they can afford to ramp up prosecution of white-collar crime? If they instead simply spend less on in-state civic regulation, that decline in aggregate demand "spent into the economy" will tend to offset their imagined savings.
Can you play musical chairs while high on pot?
Could be comical.