Reducing the Drug War’s Damage to Government Budgets

Abstract

This Article examines ways that governments can mitigate the economic damage caused by the drug war. Part I details four specific legal reforms enacted in Colorado, which aim to reduce the problems of over-criminalization: Requiring a fiscal note for the creation of new statutory crimes; reducing drug possession from a felony to a misdemeanor; narrowing the scope of 'three strikes' laws, and; adjusting old sentences in light of new laws.

Part II explores the fiscal benefits of ending prohibition, such as reduced law enforcement costs and substantially increased tax revenues.

Part III analyzes the conflict between congressionally-imposed prohibition, and state laws to partially or completely re-legalize marijuana. In the past, the Supreme Court misinterpreted the commerce clause in a way that made it difficult for states to enforce alcohol prohibition within their borders. Today, Supreme Court misinterpretation of the commerce clause makes it difficult for states to choose to regulate and tax the possession or use of marijuana within their borders. Among the reasons that congressional hegemony is constitutionally wrong is that such hegemony interferes with the states' reserved taxing powers under the Tenth Amendment.

Keywords: drug war, economic harm, federalism, marijuana, taxes

JEL Classification: H23, H26, H59, H62, H77, K14, K34, K42, I18