The GOP tax bill, passed hastily Friday night in the Senate, may wind up giving states a huge incentive to legalize recreational marijuana. That’s the analysis of Bradley Tusk, a New York political strategist and venture capitalist.
Why? Here is how Tusk, writing for CNBC, explains his theory:
Ironically, in getting revenge on blue states by eliminating the state and local tax deduction (SALT) in the new federal tax bill, the Republican Congress and Donald Trump may be giving all of those states every incentive to legalize recreational marijuana today – and eventually legalize other drugs too.Take New Jersey and New York. Both are very high tax states where eliminating the SALT deduction will hit residents and local governments especially hard. Now that New Yorkers and New Jerseyites are going to see their federal taxes rise by as much as 7 to 8 percent, they’re going to have to find savings somewhere.
As Tusk points out, this is the same path states took when legalizing casino gambling and lotteries:
One state, looking for new revenue without wanting to pass unpopular tax increases, authorizes licenses for riverboat casinos or poker rooms or tracks with slot machines.
The state next door sees its residents cross the border to gamble and they inevitably say to themselves, “Why are we losing all of this revenue to Indiana/ New Jersey/ Arizona?” Then they authorize their own casinos to try to recapture the revenue (and it’s far easier to justify the decision when the state next door is already doing it).
Tusk ends his story saying the most obvious way for the GOP to prevent this possibility is to Just Say No. To tax reform:
As someone who strongly believes that the War on Drugs is immoral, ineffective and idiotic, I’d be thrilled to see this happen. But when Trump, Mike Pence Paul Ryan, Mitch McConnell, Orin Hatch, Kevin Brady and their colleagues were sitting around laughing about how they could finance tax cuts and punish blue states at the same time, you can bet they didn’t think they were also creating an express lane to legalize a host of recreational drugs.
Currently, eight states allow retail sales of recreational marijuana and 29 states have some form of medical marijuana.