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1 Gavin Ekins & Joseph Henchman, Marijuana Legalization and Taxes: Federal Revenue Impact 1 (2016)

handle is hein.taxfoundation/mjlegtxs0001 and id is 1 raw text is: TAXO FOUNDATION FISCAL FACT No. 509 May 2016 Marijuana Legalization and Taxes: Federal Revenue Impact By Gavin Ekins Joseph Henchman Research Economist Vice President, Legal & State Projects Key Findings * Marijuana tax collections in Colorado and Washington have exceeded initial estimates. A mature marijuana industry could generate up to $28 billion in tax revenues for federal, state, and local governments, including $7 billion in federal revenue: $5.5 billion from business taxes and $1.5 billion from income and payroll taxes. A federal tax of $23 per pound of product, similar to the federal tax on tobacco, could generate $500 million per year. Alternatively, a 10 percent sales surtax could generate $5.3 billion per year, with higher tax rates collecting proportionately more. The reduction of societal risk in being engaged in the marijuana trade, as well as the inclusion of taxes, will combine to reduce profits (and tax collections) somewhat from an initial level after national legalization. * Society pays all the costs regardless of legality but tax revenues help offset those costs. The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and local levels. We are a 501(c)(3) non profit organization. ©2016 Tax Foundation Distributed under Creative Commons CC BY NC 4.0 Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org

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