Wednesday, January 30, 2008

Let Not the Left Hand Know What the Right Hand is Doing

Cash-Strapped States Resort to Odd Taxes

More than a half-dozen states have a tax on narcotics and other controlled substances. Theoretically, a drug dealer in North Carolina can go to the state revenue office and get a tax stamp for $50 per gram for cocaine over 7 grams (the first 6 grams are tax-free). A moonshiner could get a stamp for $1.28 per gallon of mash.

Then the dealer or the moonshiner can walk away—the law prohibits snitching on anyone who buys the stamps—with proof he paid his debt to the tax department.

The idea is that a peddler, even one who sells illegal substances, should pay taxes. But in reality the revenue is only collected after arrests, when dealers are slapped with a tax bill.

"The only folks we have buying those stamps are stamp collectors," said Kim Brooks, spokeswoman for the North Carolina Department of Revenue.

How does that work, legally? If he buys the tax stamp for his illegal product and slaps it on there, can you then arrest him for selling it? Doesn't that make the state complicit with the illegal act? I wish someone would do that and go through the court system with it. Any volunteers?

Just pass the FairTax already!

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