Cite the major economic arguments for legalising marijuana in Canada? What would
ID: 1122202 • Letter: C
Question
Cite the major economic arguments for legalising marijuana in Canada? What would be your economic critique of the Harper government’s ideological commitment to ‘non-decriminalisation of pot’ in Canada?
A favourite slogan among accountants is: “taxes deferred are taxes saved”. Do you agree? Explain fully, using an appropriate example.
“The HST ignores provincial sovereignty over tax collection, has broadened the tax base and generally favours firms over consumers, despite claims to the contrary”. True or false? Provide a theoretical (and even empirical) defence of the position that you are taking.
Explanation / Answer
Answer:
1) Major economic arguments for the legalizing the marijuana are as follows:
1. The legalized coverage of marijuana will increase the monitoring and supervision and the crime rates will come down. More traders will join the mainstream of the economy.
2. The leakage due to the illegal trade will come down and government can earn the tax or other duties upon the trade of marijuana.
3. The medicated benefits of the marijuana will be spread to more people and health care industry will be benefitted.
The one critic is the doubt upon the use of marijuana in the medication purposes, and R&D. Further, the legalization will officially increase the access of the population towards marijuana without its proven medical benefits. It can harm the public health and youth can take marijuana and fall in the trap of drug paddlers. Further, the marijuana is still not legalized in many countries. Hence, there is a scope of illegal smuggling of marijuana from and to the country of Canada. It will create a conflict between the Canada and other country.
2) Yes. The taxes deferred refer to delaying the payment of taxes to a later date. A very common way of deferring tax payments is the investment in the retirement plans or the savings scheme. These ways help the individuals to escape taxes for some time. However the taxes will be played in the future in terms of taxes on interest payments. The savings in real terms depending on the discount rate for future consumption and the inflation rate which essentially determine the true value of money. Thus is the individuals discount rate is low and if the inflation rate expectations in the future period are low then this slogan is agreeable. Also with the money from tax deference, the interest earnings are compounded and even though the amount in the end will be higher even after the payment of taxes.
3) False because it kills the job and hurts economy.HST is not necessary to stimulate economic growth. Further it is clear 80% goods and services are subject to B C HST and 5% GST. It is not correct to pose tax on services. The question here is if u pose tax on health and education why not on arts like music, dance etc...
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