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The latest statistics on weed legalization give the impression that it has the potential to save the United States from an economic crisis. According to latest study, if cannabis were legalized today, it would create over a million jobs and bring in $131 billion in tax revenue for the federal government. Now, if we’re talking about incentives for the federal government to finally draw a line under prohibition, this has to be it.
All of a sudden, weed seems to have some serious benefits for state and federal governments. It is unfortunate that President Trump’s inner circle has decided to impose federal intervention on the states and their “criminal activity”. Well, if you can’t beat them, join them! That’s what they say, right? Hopefully, in light of recent revelations, the feds will be inspired to join them rather than beat them!
It’s all about these taxes
The New Frontier study gets its estimate assuming 15% retail sales tax, plus payroll taxes, plus business tax — and for the federal government, that means serious bejamins.
As a note, Washington’s current retail sales tax for cannabis is well over $15, sitting at 37%. So while the estimate was based on 15%, there could be even more for the federal government, depending on the state designated sales tax.
Assuming the 15% sales tax is applied to all 50 states in the United States, total sales tax revenue between 2018 and 2025 would theoretically be around $51.7 billion.
New Frontier Data also estimates in their study that The quantity of marijuana jobs needed to sustain the industry would start at around 780,000 and eventually reach around 1.1 million by 2025. That means everything from budtenders and growers to botanists and makers of all that smoking paraphernalia we love. It also equates to a lot of payroll tax deductions for the federal government. It is estimated at around $6 billion.
Finally, companies must also pay 35% tax! The combined total of payroll tax deductions, retail sales tax and business tax, the federal government is expected to earn $131.8 billion over the next seven years. And – most of that revenue would be brand new revenue for the government, given that they don’t make money from weed because they refuse to legalize it.
Governments don’t make money from black market sales
While the black market would still represent 25% of the industry, the forecast is still huge for the federal government. Nationwide legalization would mean a lot of consumers, a lot of jobsa lot of taxes and finally a lot of money floating – unlike the current black market model that still takes place in prohibition states. The potential for weed in states where cannabis is illegal still rests in the hands of illegal drug dealers and underground growers.
Maybe the guys at the top neglected to recognize what’s in it for them. Which is a lot of dough, quite frankly. Not to mention what’s in it for people, like an end to their current unemployment problem.
Could this latest study inspire Trump and his team to reconsider their views? In the end, the states make a lot of money that the feds guys probably want a piece of. The ban doesn’t seem to matter to state governments, which are pursuing legalization efforts at full speed. There are already 8 states on the map of the United States that have legalized recreational activities – Oregon, Washington, Maine, California, Alaska, Colorado, Massachusetts and Nevada. California alone is expected to reach $1.4 billion in recreational sales over the next three years.
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