Do It Arnold, Tax Marijuana To Balance California’s Budget


A lawmaker from San Francisco proposes legalizing marijuana in California and then taxing it, in order to shore up the state’s horrible finances. He believes it could raise $13 billion in a year. We’re all for it for a variety of reasons.

  • In addition to increased tax revenue, it would probably save the state on law enforcement and prison spending (watch for California’s powerful prison-workers union to oppose this).
  • California has historically been a model for the rest of the US, so it’d be a good test to see what other states could do.
  • It would force Obama to take a stand on a thorny state’s rights issue. Liberals tend to be, well, liberal on pot, but not so much on state’s rights, so that’d be a good test.
  • Current pot laws are dumb.

That being said, we don’t think this will work perfectly. In New York, for example, where cigarettes are legal but heavily taxed, there’s a thriving black market for smokes brought up illicitly from Virginia. You’d still get the same with pot. People would still trade through informal, tax-free networks, so we doubt the revenue bump would be quite as good as they expect.