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Need revenue? Legalize and tax pot

Noting that in 1940, the nation's taxes on newly lawful liquor sales represented 11 percent of all tax revenue, Bloomberg columnist Amity Shlaes, with tongue in cheek, pointed President Obama to a similar opportunity: Legalize marijuana, then tax the heck out of it. "Our leaders could suppress all scruples and just jump into the marijuana business outright," she wrote. "As Stephen Easton, an economist at the free-market Fraser Institute in Vancouver has written, Canada's experience with legal marijuana suggests that the U.S. federal government can raise as much as $100 billion in revenue." Not that Shlaes is advocating more "tax sanctimony,” when government links a tax to a social purpose: "The greater economic reality is that a simpler tax code with fewer distorting incentives and disincentives tends to increase economic efficiency."

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