The federal government should legalize and tax marijuana and Internet gambling to help get the country out of the current debt crisis, writes Rep. Jared Polis, a second-term Colorado Democrat, on Wednesday’s Wall Street Journal op-ed page.
(You can read the intro here; the full article requires a subscription to the Wall Street Journal.)
Though many Republicans have signed the anti-tax pledge put forward by Grover Norquist’s Americans for Tax Reform, that promise “does not preclude provisions that will increase revenue without actually increasing taxes on Americans,” Polis argues.
So, he says, Congress should look for ways to do just that. His ideas, and others like them, “are fully consistent with the Norquist pledge and produce substantial new revenue streams for the federal government. They should all be on the table, along with spending cuts, if we are to break free of the rhetorical shackles that prevent cutting the deficit.”
Where medical marijuana is legal — in 16 states and the District of Columbia — governments bring in millions of dollars annually in tax revenues and, based on a 2005 study by a Harvard University professor, the federal government could take in $2.4 billion a year if it legalized and taxed pot nationally.
Changing federal laws on Internet gambling could bring in a bit more money, Polis says, with one estimate suggesting that $42 billion in new revenues could be generated by legalizing and regulating Internet gambling — a measure that has some support from members of both parties.
Even more revenue could be generated if the federal government were to require more than 10 million illegal immigrants living in the United States to obtain legal status and to pay back taxes and fees. In all, such a measure could raise as much as $5.4 billion in new revenue, Polis says, though it would come only with the kind of immigration law that Congress has been unable to pass for years and is still stalled on.
Immigration reform also would bring in big annual revenues, Polis contends. A bipartisan bill considered by the Senate in 2007 would have brought in $12 billion annually by 2012 and $48 billion by 2017, according to Congressional Budget Office estimates.
And there are more ways to raise new revenues without increasing taxes in the strictest sense, Polis says, suggesting a one-year tax amnesty program for tax evaders to get right without facing penalties. One study by Arthur Laffer, an economic adviser to President Ronald Reagan, found that one year of amnesty could bring in $800 billion to $1 trillion in revenues over the course of a decade, the congressman says.
– Article originally from Politico.