The federal government and the majority of US states are throwing away $28 billion in yealry tax revenue by refusing to legalize marijuana, as shown by a new study by the Tax Foundation, an independent think tank.

Just over $20 billion of that revenue would go to states through tax collections on marijuana sales and payroll taxes from people employed in a legal marijuana industry.

The federal government would stand to gain about $7.5 billion, mostly from income and payroll tax, and about $500 million in excise tax  if marijuana is taxed like tobacco.


These are estimates relying on a certain number of assumptions about the size of the marijuana market ($45 billion in sales annually) and the ways that governments decide to tax the sale of the drug. For instance, if the federal government decided to slap a 10 percent surtax on marijuana sales rather than a tobacco-style per-pound tax, that $500 million excise tax figure would grow to $5.3 billion.