Can Legal Weed Reshape The Federal Budget? Cato Institute Looks At Impact On Taxes And Fed Spending
An analysis by the Cato Institute, a U.S. think tank headquartered in Washington, D.C., reveals how the federal legalization of cannabis could significantly transform the U.S. federal budget landscape.
Authored by Alex Brill, Brian J. Miller and Stan Veuger, the research presents a detailed exploration of potential economic impacts stemming from the legalization, regulation and taxation of cannabis.
Labor Participation Key To Cannabis Revenue
According to the study, federal actions to regulate cannabis could generate new excise taxes and regulatory fees while influencing labor supply changes, thereby affecting overall tax revenues. On the expenditure side, potential savings are highlighted in areas like prohibition enforcement, offset by increased costs in regulating cannabis products and possibly its prescription, depending on regulatory treatment.
Key findings suggest the most substantial revenue boost could come from increased labor force participation, as cannabis serves as an alternative pain management therapy. This could …