One can never underestimate
enthusiasm that politicians have for trying to hunt up tax revenues. The creativity of some politicians can lead to bizarre taxes and unfortunate results.Taxes on Illegal Drugs
One argument for legalization of various narcotics is that massive tax revenues would be created. Interestingly, a few states already are trying to collect such taxes!
More than 10 states have tried to tax people that possess illegal drugs. For example, Kansas levies a drug tax on dealers as soon as they take possession of substance. To avoid prosecution for failure to pay drug tax, individuals possessing drugs are supposed to purchase “drug tax stamps” and attach stamps to drugs in question. The stamps are valid for 3 months.
In an apparent attempt to promote compliance, Kansas Department of Revenue promises:
“A dealer is not required to give his/her name or address when purchasing stamps and Department is prohibited from sharing any information relating to purchase of drug tax stamps with law enforcement or anyone else.”
The tax is levied on cocaine, marijuana, methamphetamines and other hard drugs. Interestingly, state collected over $300,000 in such taxes by going after individuals that were charged with criminal activity. This is better known as “Al Capone Theory”, which is derived from fact that authorities were able to put away famous mobster on tax evasion charges. Alas, criminal prosecutors have not always welcomed illegal drug tax.
