Monday, March 3, 2008

Taxing Dimebags? What Is Spitzer Smokin'?!?

There's dumb politicians, dumberer politicians, and normally smart dudes like NY Governor Eliot Spitzer, who is in the process of proposing the dumbest piece of legislation I've evar heard of.

If you can't beat it, tax it. That seems to be the axiom in New York these days, where Gov. Eliot L. Spitzer (D), struggling to close a $4.4 billion budget gap, has proposed making drug dealers pay tax on their stashes of illegal drugs. The new tax would apply to cocaine, heroin and marijuana, and could be paid with pre-bought "tax stamps" affixed to the bags of dope.

Taxing illegal drugs is more widespread than is generally known. At least 21 states have some form of tax for illicit drugs, although some of those laws have been challenged in courts, and others have fallen into disuse. Almost all the remaining drug-tax laws are used mainly by local law enforcement agencies as a way to seize drug money and fund counter-narcotics operations.

The controversial idea grew out of the efforts to fight bootleggers such as Al Capone during Prohibition -- going after the bootleggers for unpaid taxes often required a lighter burden of proof than a criminal prosecution. Taxing illicit drugs gained popularity during the 1980s and early 1990s, when prosecutors and law enforcement authorities were pushing for mandatory sentences and other measures to signal a crackdown on drugs and drug use.

His "crack tax" aims to raise $17 million annually primarily through a circuitous collection system: police seize illegal drugs; prosecutors notify the state; the state sends the dealer a bill for back taxes, fees and interest. Gov. Spitzer would let pushers ply their trade as long as they pay their taxes. His tax stamp would be a stamp of approval for illegal drug sales and use.
As NY Attorney General, Spitzer always impressed me as the type of politician willing to make a bold move without concern for public opinion. Dude took on the Gambino family. He nailed computer chip manufacturers for price gouging. He recovered unpaid royalties for starving musicians. He outed corruption on Wall Street. He slammed radio stations for taking payola. Clearly he isn't one to protect status quo or think inside the box.

This move, however, reaks of dementia. I mean, seriously, asking dope boys to collect sales tax on dime bags and report their earnings to the state is just downright ludicrous. What are you gonna tax next? Dogfight earnings? Street walkers? The dude who sells bootleg DVD's in the barbershop?

Spitzer's first term as governor has been marked by public backlashes of his approval of gay marriage and drivers licenses for illegal immigrants, and his own circumvention of campaign-contribution laws. Despite winning a landslide election in January 07', dude's approval rating is already approaching the Mendoza-line and the state is facing a massive budget deficit. So, just maybe this is a plea for public support by going at low-hanging fruit. That said, there's also the seldom discussed issue that drug dealers, especially the low-level players this law would be targeting, don't exactly make much money in the first place. As the excellent 2005 book Freakanomics taught us, most street-level dope boys make less than minimum wage when you factor in all the occupational hazards. War on drugs my ass. Either way, it just doesn't add up to me.

I'm not one for legalization of illegal substances, but to me, this seems dangerously close. If you're taxing it, you're claiming your piece of it, which seems to give an illegal operation some air or legitimacy. On the other hand, if certain drugs were legalized, imagine the savings from an enforcement, prosecution, and incarceration standpoint. This wouldn't make episodes of HBO's brilliant The Wire (imagine Marlo Stanfield working at Target instead of working the block) very exciting, and what exactly would (c)Rap music have left to talk about? But then again, maybe it would spare us the agony of watching otherwise intelligent politricians like Spitzer gasp for straws to close a budget gap.

Question: Do you think the "Crack Tax" makes any sense? What's you're overall feeling about the legalization of controlled substances?

New York 'Crack Tax' Proposal Is Derided [WashPost]

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