They took my whole pay check, and I know why

Dateline Albany:  New York Governor Eliot Spitzer proposes "making drug dealers pay tax on their stashes of illegal drugs." 

Basically, Eliot wants to tax dealers on their inventory.

He is using half of my idea-- taxing drugs.  The other half of my idea was to legalize drugs.  The whole idea is my "legalize them [drugs] and tax the shit out of them.   

In this way, my decriminalization of drugs stance leaves me in the good graces of libertarians. 

Spitzer's perversion of my idea, however, demonstrates  his enviable talent of proposing legislation that manages to piss off everyone. Drugs might be good enough to be taxed (pissing off anti-drug factions), but not enough to legalize (sorry NORML.)  And we get a new tax (club for growth just fired up its email.) 

We could close a budget gap, and maybe provide better funding for schools and infrastructure.  But we all know that much of that extra money will just go towards paying the salaries of agency heads and their staff.

From a legal standpoint this proposal is interesting in that the government wants to have some sort of interaction (and interference) with an underground economy.  I am more qualified to address the Constitutional issues that arise than the tax issues (so go my predilections as an attorney.  That being said, if there was an opening for a tax attorney, I would send in my excellent resume.  Being at the stage in my career that I am, I can apply for a tax attorney position while being a con law geek.  Lawyers just out of law school are sluts like that.)

WaPo provides a condensed discussion of several states that have attempted to tax illicit substances, pointing out that North Carolina taxes Moonshine.  Other states, "have designed distinctive drug stamps, often depicting a marijuana leaf. Nebraska's drug stamp depicts a rolled joint crossed with a syringe in front of a skull and what appears to be a headstone, with the label "R.I.P."  The article explains that Nebraska's unicameral legislature required that all citizens be able to purchase the stamp.  Apparently it is a collector's item, with only an occasional drug dealer making a purchase.

Now, from a stance of criminalizing drugs, a drug dealer who does not pay the tax, will be potentially guilty of tax evasion.  Which as we all know, Al Capone was convicted on.  Here is how it works, to prove criminal guilt you apply a stricter standard of proof ("beyond a reasonable doubt") than you would for a civil matter such as tax evasion (avoision-- it's a word, look it up.)

Now if Spitzer were to follow a watered down version of my proposal and legalize drugs in New York State, we might end up rehashing Gonzalez v. Reich.   The DEA could still assert its right to raid a grower or dealer in NY.  Reich is a case where the Rehnquist court determined that the selling and growing of marijuana in California affected the national marijuana market, and thus regulating marijuana fell under the federal government's power to regulate interstate commerce.  Meaning, effectively, that if marijuana (and other drugs) is legalized in NY, the effects of such legislation would have an impact on the national illegal drug market.  Thus federal law can preempt state law.  If anything, legalizing drugs in one state, even for tax purposes, would allow the federal government to reinforce its war on drugs with additional cases making their way to the SCOTUS, and more draconian legislation.

This is not what Governor Spitzer is proposing, however.  Drug use, purveyance, and possession  will still be illegal activities, with the attendant consequences (subject matter for another blog entry).  It's just under Spitzer's plan drug dealers will get to join low wage workers in their 'hoods in getting fleeced by H&R block in April.

Comments

[Zeus' Father]

Odd how nothing else seems to affect (it is spelled with an "a" in this sentence as it should be above)interstate commerce in the view of the 9 supremes.

[AM]

Thanks for catching that.

When one is intent on not using 'impact' as a verb, certain things slip under the radar, I'm afraid.