Pot Legalization: A Common-Sense Way of Fighting Organized Crime

I have some bad news and some good news.

The bad news is that politicians have come up with another proposal for an additional tax.

Some people like prohibition

The good news is that they can only impose this new tax if they ease up on the silly Drug War.

That creates a bit of a quandary if you believe in freedom and small government.

But, on net, it’s a move in the right direction.

We have two examples to share. The first is from South America, where the government of Uruguay seems poised to legalize marijuana. Here are some blurbs from an AP report.

Uruguay is pushing ahead to create a legal marijuana market… The Senate planned to debate the pot plan Tuesday, with approval by the ruling coalition widely expected before the night is over. Because senators turned away all requests for amendments after it passed the lower chamber, their vote will be final.

One reason for this proposed reform is to fight organized crime.

President Jose Mujica says the point is not to promote marijuana use, but to push out organized crime. The government hopes that when licensed growers, providers and users can openly trade in the drug, illegal traffickers will be denied their profits and go away.

Let’s give President Mujica an A+ for economics. He recognizes that criminalization creates a black market.

But Uruguay politicians are not exactly dreamy-headed libertarians. Big government would be involved.

Socialist Deputy Julio Bango, who co-authored the proposal, told The Associated Press that “this is not a law to liberalize marijuana consumption, but rather to regulate it. Today there is a market dominated by drug traffickers. We want the state to dominate it.”

And the article also mentions that legalization would be accompanied by heavy taxes. I don’t like that part, but there’s no question this would be a net plus for liberty and crime reduction.

Some lawmakers in New York also seem to understand that prohibition is illogical. Here are some excerpts from a local news report.

State Sen. Liz Krueger’s measure — the Marijuana Regulation and Taxation Act — would legalize, regulate and tax marijuana under state law. “It will take the market in marijuana away from the criminal enterprises, just as happened when alcohol prohibition was ended,” she said at a City Hall press conference.

Kudos to Krueger for her grasp of incentives. The Drug War is just as foolish – and just as good for criminals – as prohibition.

Though I wonder whether Sen. Krueger is being too greedy.

“It would establish an excise tax of $50 an ounce of marijuana and authorize localities to charge a sales tax on retail sales if they wish to,” Krueger said. …Liu estimates that a pot tax would generate $431 million in New York City alone.

I’ve never done drugs, so I’m not familiar with the market, but I do know that if the tax is too high on a legal product, you create a black market.

That happens with cigarettes, for instance, and we examples of excessive taxation causing less revenue from Bulgaria, Romania, and Ireland. And we’ve even seen this Laffer Curve effect in Washington, DC.

Last but not least, we should never forget that the Drug War is a horrifying example of Mitchell’s Law, with one bad policy leading to another bad policy.

The War on Drugs, for example, is the reason why politicians imposed costly and ineffective anti-money laundering laws. As well as disgusting and reprehensible asset forfeiture laws.

P.S. Libertarians are not the only ones to think the drug war is foolish. Yes, you find libertarians such as John Stossel and Gary Johnson on the list of those who want to end prohibition. But you also find John McCain,  Mona Charen, Pat Robertson, Cory Booker, and Richard Branson.

But maybe you disagree with all those people and would rather be on the same side as Hillary Clinton.

P.P.S. This is not an issue of whether you approve of pot use. You can be strongly against drugs, like me, but also realize that it makes no sense for government to get involved. Particularly since criminals are the ones who benefit.

P.P.P.S. The Drug War gives the government immense powers to engage in bad policy.

• The DEA trying to confiscate a commercial building because a tenant sold some marijuana.
• The government seeking to steal a hotel because some guests sold some marijuana.
• The feds grabbing cash from innocent bystanders in legal cases.
• The government arresting a grandmother for buying cold medicine.

Or sometimes the Drug War merely exposes government stupidity.