According to a recent report from the CBO(Congressional Budget Office), the state legislation bill approved early this month by America’s house of representatives would accumulate a net revenue of nearly $13.7-billion within the next decade. It’ll also reduce federal prison expenses by about $1-billion.
A significant amount of the new funds(about $8-billion) would originate from the marijuana industry’s business taxes such as payroll and income taxes. A different excise tax, originally revolving around cannabis products’ price, is expected to deliver $5.7-billion.
The nonpartisan report released on Friday states that CBO and the Joint Committee staff on Taxation expect the H.R. 3884 to increase revenues by nearly $13.7-billion between 2021 and 2030.
Dubbed as MORE (Marijuana Opportunity Reinvestment and Expungement) Act, the House-passed regulation would scrap off marijuana from the state-controlled substances Act. It would also exempt past cannabis-based convictions and call for resentencing of various past criminal cases.
The CBO report discloses that although MJ legalization would also lead to extra government costs, the costs will be balanced off by the new revenue.
For instance, the estimated reduction in state prisoners would culminate in a projected $636-million in new expenses on state benefits programs such as Medicaid and Medicare.
The report states that state prisoners won’t be eligible for these merits. CBO estimates that by reducing the number of prisoners, H.R. 3884 would alleviate the number of state beneficiaries than the existing law. This will increase direct costs for state benefit programs.
The expected USD5.7 billion from cannabis excise duty will find its way to the Opportunity Trust Fund. After that, the projected USD3 billion will be utilized by the Justice Department within the decade to offer legal aid, job training as well as other services to adversely affected communities. The $2.7-billion will be used by the SBA (Small Business Administration) on domestic and federal grants to MJ-related start-up businesses that assist in developing licensing rules.