Forget Taxing Marijuana; The Real Money's In Cocaine

A Harvard economist has estimated how much money states would raise by legalizing and taxing marijuana and cocaine.

In a podcast a while back, Harvard's Jeffrey Miron told us that his estimates for what California would bring in from taxing marijuana are much smaller than some of the numbers that are floating around out there (including a $1.4 billion estimate from state officials).

Since that interview, Miron has come out with a paper estimating, among other things, potential tax revenues from cocaine and marijuana.

It turns out the big tax money is in cocaine.

Sure, legalizing marijuana is highly unlikely and legalizing cocaine isn't even on the table in mainstream politics. Still, it's interesting to know what the numbers would be -- particularly when they're coming from a Harvard economist.

Here's a table that shows Miron's estimates for the annual tax revenues each state would get from marijuana and cocaine. (The figures are in millions; for more details, see the explanation and links after the table.)

State	Marijuana	Cocaine
Alabama	25.59	80.54
Alaska	6.53	16.28
Arizona	41.91	177.67
Arkansas	19.87	54.49
California	201.74	767.73
Colorado	46.97	133.74
Connecticut	22.57	72.53
Delaware	6.07	18.76
Florida	142.05	362.34
Georgia	86.75	213.96
Hawaii	10.09	21.59
Idaho	11.73	22.66
Illinois	83.98	263.93
Indiana	43.44	120.04
Iowa	18.72	45.94
Kansas	16.69	53.95
Kentucky	28.05	77.79
Louisiana	30.02	97.43
Maine	6.64	25.46
Maryland	37.68	113.79
Massachusetts	44.94	167
Michigan	69.04	174.55
Minnesota	45.43	102.31
Mississippi	19.67	41.17
Missouri	54.99	111.28
Montana	7.94	19.29
Nebraska	13.87	29.13
Nevada	13.97	53.19
New Hampshire	9.03	29.18
New Jersey	74.6	140.31
New Mexico	11.92	47.42
New York	136.81	464.05
North Carolina	87.88	191.04
North Dakota	4.02	9.54
Ohio	88.7	248.79
Oklahoma	29.23	58.23
Oregon	24.09	76.88
Pennsylvania	73.73	211.85
Rhode Island	7.75	37.12
South Carolina	26.29	79.71
South Dakota	7.28	11.96
Tennessee	39.94	146.9
Texas	270.39	483.02
Utah	16.34	53.16
Vermont	3.67	15.86
Virginia	53.35	175.63
Washington	35.76	143.55
West Virginia	8.97	36.65
Wisconsin	61.12	114.16
Wyoming	3.72	11.26
DC	4.82	25.94
Total	2,138.47	6,234.11

On top of state revenues, Miron estimates that a federal taxes would amount to $4.28 billion for marijuana and $12.47 billion for cocaine.

Miron figures taxes on the drugs would be comparable to taxes on alcohol and tobacco. His estimates for how many people in each state use marijuana and cocaine are based on a government survey. (He notes that the number of users would likely rise if the drugs were legalized, but his estimates don't account for this.) He estimates that if marijuana and cocaine were legalized, their prices would fall by 50% and 80%, respectively. The research was funded by the Criminal Justice Policy Foundation; here's the foundation's take on drug policy.

@'NPR'