(HuffPost) As Washington lawmakers struggle to find ways to balance the national budget, a significant source of revenue may be burning away right before their eyes.
The federal legalization of marijuana would offer a large new revenue stream, according to research from the Cato Institute, a libertarian think tank.
“We don’t know the size of the marijuana market right now, and we certainly don’t know what would happen to the price and the demand for marijuana under different levels of legalization,” Carl Davis, senior analyst at the Institute on Taxation and Economic Policy told The Huffington Post. “But we do know that legalization would lead to a positive revenue impact on the income and sales tax side.”
According to a 2010 study from Cato, legalizing marijuana would generate $8.7 billion in federal and state tax revenue annually.