Affiliation:
1. American Enterprise Institute Washington District of Columbia USA
2. Johns Hopkins University and American Enterprise Institute Washington District of Columbia USA
3. American Enterprise Institute and IE University Washington District of Columbia USA
Abstract
AbstractFederal legislation to legalize, regulate, and tax cannabis could have significant impacts on the federal budget. While the specific details of any potential cannabis legalization legislation are unknown at present, such reforms are likely to affect both tax receipts and federal outlays through a wide range of mechanisms including excise tax collections, changes in the size and composition of the labor force, and the major federal health care programs. We identify the main federal budgetary implications of legalizing cannabis and estimate their likely magnitude where possible.