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Don’t Boycott that Taxable Commodity

The Oregon House of Representatives voted May 30 to allocate $900,000 from the marijuana program’s $1.1 million surplus to meet unrelated Department of Human Services expenses. The marijuana program was created by a voter initiative in 1998. Since then, more than 10,400 patients have paid fees to register and renew. The fee was $150 when the program began but has been lowered as the surplus accrued. Today the fee is $55 ($20 for members of the Oregon Health Plan). It could have been reduced further if the legislators didn’t decide to dip into the cannibucks for other purposes.

How long can government refrain from taxing instead of prohibiting the marijuana industry? There would be annual savings of $7.7 billion and tax revenues of $6.2 billion if marijuana were legalized, according to a report issued last week by Jeffrey Miron, a Visiting Professor of Economics at Harvard. Underwritten by the Marijuana Policy Project, the report projects savings of $5.3 billion now spent by state and local governments -police arresting, courts prosecuting, and jails and prisons incarcerating people for selling marijuana. The federal government would save $2.4 billion by calling off its marijuana interdiction efforts.

In estimating potential tax revenue, Miron uses the Drug Czar’s figure of $10.5 billion spent by U.S. residents on marijuana in 2000. His assumption that legalization would not increase demand “likely biases the estimated tax revenue downward,” he notes. He foresees two offsetting effects on supply. On the one hand, production might rise because “marijuana suppliers in a legal market would not incur the costs imposed by prohibition, such as the threat of arrest, incarceration, fines, asset seizure, and the like… On the other hand, marijuana suppliers in a legal market would bear the costs of tax and regulatory policies that apply to legal goods but that black market suppliers normally avoid.”

The report considers a range of options, from taxing marijuana like an ordinary commodity (which would generate $2.4 billion annually) to a high “sin tax” equivalent to 80% of the price (would raise $9.5 billion). Miron settles on a rate akin to the tax on alcohol and tobacco that would raise the price 50% and produce revenue of $6.2 billion per year. One of the tables shows how much each state stands to generate.

The Miron report can be viewed at http://www.prohibitioncosts.org/ It states the obvious and is rife with dubious assumptions and false rigor, but it serves a purpose -to advance the political discussion. Its release by MPP June 2, along with its endorsement by 500 economists, resulted in a small spate of articles and op-eds. Milton Friedman reiterated his principled position: “$7.7 billion is a lot of money, but that is one of the lesser evils. Our failure to successfully enforce these laws is responsible for the deaths of thousands of people in Colombia. I haven’t even included the harm to young people. It’s absolutely disgraceful to think of picking up a 22-year-old for smoking pot. More disgraceful is the denial of marijuana for medical purposes.”

On the Forbes website, Quentin Hardy extrapolated from Miron’s report to the possible impact of legalization on the private sector. “If the laws change, large beneficiaries might include large agricultural groups like Archer Daniels Midland and ConAgra Foods as potential growers or distributors and liquor businesses like Constellation Brands and Allied Domecq, which understand the distribution of intoxicants. Surprisingly, Home Depot and other home gardening centers would not particularly benefit, according to the report, which projects that few people would grow their own marijuana, the same way few people distill whiskey at home.”

The Marijuana Policy Project is spinning the Miron report to appeal to the war-on-terrorized. Their press release says, “Just one year’s savings would cover the full cost of anti-terrorism port security measures required by the Maritime Transportation Security Act of 2002. The Coast Guard has estimated these costs, covering 3,150 port facilities and 9,200 vessels, at $7.3 billion total.” And we can take whatever money’s left in the Oregon marijuana program and send it straight to Haliburton for pipeline protection in Iraq… Nobody more patriotic than us potheads!

 

Ricky Williams Update

Ricky Williams seems to have found a relatively dignified way to return to the National Football League. Although he’ll have to submit to drug tests as part of the league’s “treatment program” -and generally be treated like a commodity- his comments with respect to marijuana, as conveyed by his agent, Leigh Steinberg, have not been denunciatory. Apparently Williams feels he’s gotten to a place where he can do without the herb. Here’s an account from the sports page of the Palm Beach Post:

“He never really lost his drive to play football,” Steinberg said. “He’s always had a desire, a love for the game.” Williams has said that he smoked marijuana to deal with his social anxiety disorder because it worked better than prescription medication.

But in the past year Williams has studied holistic medicine in California and yoga in India, Steinberg said, adding that both disciplines discourage drug use. Williams has made friends within those circles who have acted as his support system and helped him ‘heal his body and his mind,’ Steinberg said.

The yoga has left Williams strong and limber, but thin. Steinberg said Williams weighs about 195 pounds. The Dolphins listed him last year as 5-feet-10 and 226 pounds. [Their commodity is thinner.] Williams would have to serve a four-game suspension for failing a third NFL drug test last year.

The Dolphins, who sought to recover bonuses paid to Williams, have an $8.6 million judgment against him for breaking his contract.

Steinberg was quoted by Jason Cole of the Miami Herald: “It may seem strange, but in all of his travels and searching, he seems to have found a way of life that helps him handle one of the issues he had with the NFL.”

Cole also quoted Marc Halpern of the California College of Ayurveda, who was not adverse to taking credit for Ricky’s turnaround. “He has found better ways of helping himself through Ayurvedic medicine and yoga.”

 

Sore Throat

The identification of “Deep Throat,” an anonymous source cited by Bob Woodward and Carl Bernstein in some of their Washington Post stories, occasioned countless repeats of the false standard history of the Watergate exposé. It was not Woodward and Bernstein but Martha Mitchell, wife of Attorney General John Mitchell, who first alerted us to the fact that the president himself had ordered the initial break-in and was orchestrating the cover-up. All credit has been denied her. In the movie All The President’s Men there’s a turning-point scene in which Post editor Ben Bradlee (Jason Robards) tells the intrepid young reporters he needs corroboration, the paper can’t accuse Nixon based only on the word of an anonymous source… As if the AG’s wife hadn’t already told Helen Thomas and others, “They may try to pin this on John Mitchell but it goes all the way to the top.”

In all the renewed blither about Woodward and Bernstein’s vaunted tipster we didn’t hear a mention of Martha. In the ’80s a movie about her was in the works; but then they stopped making movies for grown-ups. If they ever resume, maybe Annette Benning could play her-a Southern belle, feisty, fatally devoted to her brute of a husband.

I went to see Woodward playing Redford
Dustin Hoffman played by Carl Bernstein
Martha Mitchell, who really blew the whistle
Never got mentioned, she got no credit on the silver screen
Get back, get back in the system
Martha was a crazy, drunken dame
Not a nice respectable reporter
Watergate shows that nothing’s changed
Except for a few big shots somewhere…

FRED GARDNER can be reached at journal@ccrmg.org

 

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Fred Gardner is the managing editor of O’Shaughnessy’s. He can be reached at fred@plebesite.com

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