How can de U.S. win the war against drugs? Tax it!!!

Even though President Richard Nixon introduced us to the infamous ‘War on Drugs’ in 1971 the U.S. government has been officially battling illicit drugs since 1914.  The Harrison Narcotics Tax Act of 1914 was the first federal law written by congress to control the distribution of illicit drugs in the U.S. (and tax it).  So it’s fair to say that the government has been waging a ‘war’ on drugs for almost 100 years now.  If this were a war between countries we’d be about to make history by overtaking the war between the House of Valois and the House of Plantagenet (100 years war) as the longest recorded war in human history.

Global Drug Route Map

Why did the U.S. create laws against distribution of drugs to begin with?

Unfortunately it can be contributed in part to racism and protectionism.  According to the New York Times it was estimated that 1 in 400 people (0.25%) had become addicted to drugs by 1914, especially opium.  For the most part the ‘addicts’ were women, who had been legally prescribed some form of opiate by their physicians to treat ailments such as menstrual pains.  Since legally prescribed opiates or marijuana had to be bought from Chinese immigrants (opiates) or Mexican immigrants (marijuana) it stirred racists overtures by politicians, especially from the south, who were looking to grab some easy votes from the white majority.

The politicians objected to the lucrative trade without the federal government being able to collect taxes on it and used unfounded crimes committed by minorities to blame it on drugs.  Racist articles published in the Journal of the American Medical Association back in 1900 added fuel to the fire and helped push the first federal law against the distribution of certain drugs through congress.  Never mind that physicians were making a lot of money prescribing the drugs to their patients.  Even companies such as Sears Roebuck got into the act; in the 1890s in its catalogs you could buy syringes and a small amount of cocaine for $1.50.

Has this law or subsequently other laws reduced the distribution of illicit drugs?

Of course the answer is no.  In fact the distribution of drugs has never been this high in recorded human history.  1% of global GDP can be contributed to the drug trade.  In 2003 the U.N. estimated that $321.6 billion in drugs was traded worldwide.

Mexican Drug Trafficking Activity

Many experts compare the ‘failed’ war against drugs to the prohibition period in the U.S. from 1919 to 1933.  The Eighteenth Amendment to the United States Constitution made it illegal to manufacture, sell and distribute alcohol.  Sadly, we all know the unfortunate consequences of this ‘experiment’ in U.S. history.  It was the driving force in expanding organized crime and resulted in mostly low income people being thrown in jail for violating the prohibition laws, which is exactly what’s happening with the war against drugs.

How much does the war on drugs costs the U.S. annually?

It costs the U.S. government (federal, state and local) about $40 billion per year.  To give you an idea of the astronomical dollar impact fighting this war, in 2008 1.5 million Americans were arrested for drug violations; of those, 500,000 ended up going to jail.

US Incarceration Rate

It costs between $25,000 (federal prison) and $26,000 (state prison) per person to incarcerate someone for one year.  An average drug violator costs the government (federal , state and local) about $450,000.  This covers the costs of arrest, conviction, room and board.

Besides the cost of imprisoning a drug violator, the federal, state and local governments spend billions for treatment programs, educational programs and supporting foreign government in their fight against drugs.  In 2008 alone, congress appropriated $1.6 billion in aid to central American governments over three years in order to assist them in the fight against drugs.  Let’s not even go into the billions of dollars wasted in lost productivity due to drug abuse and the war against drugs.

So how do we win this war against drugs?

Tax it!!!  Of course in order to do that you’d need to make the drugs legal for manufacturing, sale and distribution.  I know, it’s highly controversial, but in today’s budget crisis (federal, state and local) it makes financial sense to legalize it.  It’s no wonder states are slowly adopting marijuana as a legal form of trade in order to fill the state coffins with tax revenues.

Here’s the math as proposed by Harvard Economist Jeffrey A. Mirron: $44.1 billion in savings by no longer having to spend money on law enforcement fighting the war against drugs and $32.7 billion in tax revenues for federal, state and local governments.  That’s a total savings of $76.8 billion per year for the U.S. alone.  Of course you’d need to use a portion of the savings to fund treatment programs to get people off of drug addiction, but the savings should still add up to well over $60 billion per year.

The federal government should spend $13 billion on drug treatment programs and the states should chip in $6 billion.  This would still generate about $43 billion in added revenues to the federal government, $10 billion for state governments and $4.8 billion for local governments.

Top Benefits for taxing it:

Drug Rehab

1) Reduces Drug Abuse – the government will actually have money to treat people that it spends now fighting a losing battle.  This should ease the concerns of many more conservative groups that advocate against legalizing drugs.  Treatment is proven to be more cost beneficial versus imprisonment.  It saves $4 for every $1 spent according to an independent study at UCLA.  Again, I’m not advocating drug use, but by making it legal the government will be able to afford treatment for every addict and thus reduce drug abuse over the long run.  This is clearly a much more cost effective way to reduce drug use.

2) Revenues For Cash Strapped Governments – it would help alleviate budget deficits for many states and local governments, which in turn will help other programs such as education and public transportation.  They’re taxing addictive substances such as cigarettes and alcohol, so why not for cocaine or marijuana?

3) Reduces Crime – By taking billions of dollars away from organized crime it would destroy the income for many crime syndicates.  Neighborhoods become safe again, especially in low income areas as there’s no longer a need to protect a territory.  500,000 current drug violators going to jail will no longer end up in jail, but instead have a better chance of becoming law abiding citizens.  The prison system breeds criminals.  It’s well documented that without an effective treatment program prisoners being paroled end up going back to jail and actually become more violent in many cases.  Most drug offenders in prison/jail are non-violent anyway.  Instead, require them to go to treatment and you won’t see that many repeat offenders come back into the judicial system as you do now.

Final Thoughts…

It’s not a very popular stand to take as a politician as it can be seen as being soft on crime.  However, in today’s age wherein all forms of U.S. government is strapped for revenues, crime is relative high to other industrialized nations and the current war against drugs has no end in sight, it only makes sense to start exploring the possibility to legalize the trade in drugs.  States such as New Jersey, California and Colorado are already experimenting with legalizing marijuana.  The first results are encouraging, but a lot more work needs to be done.

Bear in mind again, I’m not advocating the use of drugs.  Companies should still be allowed to test employees for drug use and fire them if caught using drugs against company policy.  Law enforcement should still arrest people if caught driving while under the influence of a substance, but legalizing will reduce the overall number of drug users in the long run.  It will reduce crime and create a much safer society that will only make the U.S. more competitive.

Share your thoughts.

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