Harvard economist Jeffrey A. Miron's report, funded by the pro-repeal Criminal Justice Policy Foundation, looked at arrest and prosecution of drug crimes across the country, as well as taxation rates for Americans' legal vices - tobacco and booze. The Miron report assumes two things - that full legalization will mean savings in law enforcement costs and that the state, local and federal governments will see new revenues once coke and heroin are controlled and taxed.
Miron reached the following conclusions:
* Legalizing drugs would save roughly $44.1 billion per year in government expenditure on enforcement of drug laws, with about $30.3 billion of this savings going to state and local governments and the rest staying in the U.S. Treasury.
* Drug legalization would yield tax revenue of $32.7 billion annually. That's assuming legal drugs are taxed at rates similar to those on alcohol and tobacco. About $6.7 billion would come from sales of legal marijuana, $22.5 billion from sales of cocaine and heroin and the remainder from the sales of other drugs now prohibited.
The report addresses my personal sticking point when it comes to repealing the drug laws: that lifting the prohibition will likely increase sales of drugs; people not now addicted will become addicted.
But, in projecting tax revenues, Miron assumes there would be no shift in the demand for drugs, that it will stay about the same. "This assumption," the report says, "likely errs in the direction of understating the tax revenue from legalized drugs, since the [existing] penalties for possession potentially deter some persons from consuming."
Miron makes an interesting distinction between legalization and decriminalization. The latter means repealing criminal penalties for possession but keeping them for drug trafficking. Full legalization eliminates arrests for possession as well as trafficking. The advantages of full legalization are greater than those for decriminalization, Miron says, because legalization saves substantially more in prosecution and incarceration.
"Whether drug legalization is a desirable policy depends on many factors other than the budgetary impacts discussed here," Miron says. "Rational debate about drug policy should nevertheless consider these budgetary effects."
