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New York 'Crack Tax' Proposal Is Derided

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By Keith B. Richburg
Washington Post Staff Writer
Sunday, February 17, 2008

NEW YORK -- 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.

Some critics in the legislature are asking what the governor has been smoking.

"I guess if it moves, he'll tax it," said Republican state Sen. Martin J. Golden, who dubbed the proposal "the crack tax." Some opponents said that because cocaine and weed would be subject to the new levies, it should more aptly be called "the crack-pot tax."

"How do I explain to my 16-year-old son that we're giving a certain legitimacy to marijuana, cocaine and heroin?" asked Golden, a former New York City police officer who represents a Brooklyn district. "We are taxing an illegal substance." He added, "Is prostitution next?"

On the other side of the aisle, some Democrats, too, were stunned by the plan. "My initial instinct is: I don't understand it," said Bill Perkins, a state senator from Harlem. "Most of the dealers I'm familiar with are petty crack dealers -- most of them are crackheads. They are broke, to say the least. I just don't understand how you impose a tax" on broke crackheads, he said.

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.

"It was a way of getting tougher on criminals," said Joseph D. Henchman, tax counsel for the Tax Foundation, a Washington-based educational group. "It kind of boggles my mind. If you want to get tougher on drug dealers, increase the penalties."

"It's just weird to put an excise tax on an illegal substance," Henchman said. "When you tax something, it's a way for the government to say you can have it, but we want a piece of it. . . . It's sending a mixed signal."

Last September, a state appeals court ruled a drug law in Tennessee unconstitutional, saying that an illegal substance could not be taxed. In Massachusetts, that state's supreme court in 1998 ruled a drug tax was an unconstitutional form of "double jeopardy," so it is not used, although it remains on the books, according to the revenue department in Boston.

Allen St. Pierre, executive director of NORML, the National Organization for the Reform of Marijuana Laws, called the drug tax "a wacky idea. It's a quintessential example of the absurdity of the war on some drugs."


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