Why did the U.S. government prohibit alcohol starting in 1920? And why did it end this ignoble "experiment" in 1933? I have a theory. (Hint: the reason for both the launch and the sinking of alcohol prohibition centers on tax revenue.)
The Politics of Prohibition
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Is anybody running and publicizing the numbers for, say, legalizing pot? Pointing out how much tax revenue is now lost because marijuana is not now subject to sales and "sin" taxes? It has to be a pretty big number, doesn't it?
Great job!!! Always follow the money.
Don,
The website below quotes the Grace Commission Report;
http://www.uhuh.com/taxstuff/gracecom.htm
One third of income taxes "owed" is wasted on typical governmnetal stupidity, one third is not collected due to the underground economy and non-filers, and the one third that is finally collected goes entirely to pay the interest on the the phony money we are loaned by the Fed. Not one dime is spent on what people expect or think of as services.
With that in mind I am skeptical of the accuracy of this statement in your piece (linked):
"By 1920, the income tax supplied two-thirds of Uncle Sam's revenues and nine times more revenue than was then supplied by liquor taxes and customs duties combined"
That would mean that one third of what was "owed" was supplying two thirds of the total revenues, and I just find that hard to believe.
If your statement is accurate then the country was in sad shape indeed and had been for a very very long time.
Uhm, viyohds, perhaps you might want to check out the historical statistics on the national debt:
http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo3.htm.
Note that the national debt was only 22 billion at the beginning of Prohibition and end of prohibition. To back up Dr Boudreaux's point, the national debt plunged to 16 billion in the mid 20's before shooting back up to 22 billion as the Depression hit.
how much interest was being paid on 22 billion dollars? At most 3 billion I would think, probably closer to 1 billion. The Grace commission took a snapshot half a century later of a very dynamic system.
Incidentally its interesting to note that when the Depression finally ended in 1948 (when Truman abandoned alot of Roosevelt's disastrous economic policies) the national debt was 252 billion dollars, having gone up by an order of magnitude.
The real reason that prohibition started in 1920 is because they gave women the vote. There's a reason the Nineteenth Amendment came after prohibition.
It is strange that the government nickels and dimes us at every turn looking to raise revenue, the failure of our current War On Drug policy, but does not legalize marijuana for tax purposes.
But then again when one looks at the $40 billion dollars a year the Fed gives to enforcement, court, prison and drug education. With the state and local funders chipping in an additional $20 billion for imprisonment, policing and prosecution.
I am sure there are some very well financed special interest groups keeping the status quo regarding the War On Drugs.
"I am sure there are some very well financed special interest groups keeping the status quo regarding the War On Drugs."
Yeah, its called law enforcement (FBI, DEA, Customs, ATF, state police, local police, police unions, etc.).
If you want to see exactly how depraved some DEA agnest are, you should go check out the wsbsite DEA Watch.
A few years back they had quite the interesting debate:
DEA watch has archived the exchange and you have to download some kind of Windows decryption program to read them. However, I read that exchange with my own eyes on DEA watch's website.
This post on Stop the Drug War accurately reflects the content of that discussion.
Coming soon to a website near you… "Legalize Marijuana – The government needs the money." T-shirts, bumper stickers, screensavers, baby jumpers, dog bandanas, and thank you note stationery.
For those of you are fans of Dr. Milton Friedman, here is narrative by Kevin Zeese.
The Futility of Drug Prohibition
By Kevin Zeese
http://www.alternet.org/story/45010
P.S. one major problem I see with Legalized Marijuana is we would loose all the cool action stories on TV and the moves. You know – good guy vs. bad drug dealer – with the car chases and crashing. Things blowing up. Lots and lots of shooting. It’s hard to beat the action of a good drug movie.
I'm awaiting delivery of my hemp fiber hat.
So, the post should have been called "The Economics of Prohibition."
Great point about why we should be pessimistic about an early end to the drug war. The sheeple will back any nonsense perpetrated in the name of "protecting our children."
Robert – prohibition came before women got the right to vote, but I do believe they were closely related.
Actually, lots of problems in government taxation, but even more so with spending, began when women were categorically given the right to vote. Stupid, stupid idea. That privilege should be reserved for those who have a vested interest in this country (property ownership) and those who can read English. Women hate me.
Women deserve as much right as men do to determine who should be my ruler, which is to say none.
I care as little for a paternalistic state as I do for maternalistic one. I distinctly remembering as a teen that the main benefit to becoming an adult would be to not have anyone telling me what to do any more. (Cue laugh track.)
I was reading of some interesting correlations between women gaining the franchise, and some relatively "feel good" legislation that soon followed. As soon as I remember where that was, maybe I'll come back with a copy of the url. . .
You might want to take a look at:
Repealing National Prohibition
by David Kyvig
Copyright 1979 by the University of Chicago
The story of the campaign to repeal alcohol prohibition in America
http://www.druglibrary.org/Schaffer/history/rnp/rnptoc.htm
He reports in detail the anti prohibition battle from the time the 18th amendment was first passed until it was repealed.
He gives the revenue argument short shift and points out that it was part of the argument made against prohibition as early as 1926. His detailed history implies that the revenue side of the story played a very minor role.
It's well known that women's suffrage led to prohibition, as other commenters above have already noted.
Well, Don, I hope that is true. Then Bush may be the best anti- Drug War crusader our country's had in a while. Sweet irony.