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Taxing illegal activity

Reader Drake emails this article:

The Legislature is considering new taxes and some fee increases, but it’s unlikely most people would pay them.

One new tax would apply to drug dealers.

Sen. Randy McNally, a Republican from Oak Ridge, proposes to tax marijuana, cocaine, methamphetamine and other illegal drugs. Those who step forward to pay the tax voluntarily would be granted confidentiality by the Department of Revenue.

However, those found in possession of drugs without a tax stamp could be required to pay the tax.

Additionally, the legislature anticipates $3.6M in revenue from the measure (they also anticipate monkeys flying out of their own butts, but that is a different story). There are also proposals to up fees for electrical inspections and liquor licensing.

If I am the type of person inclined to disregard the law with respect to dealing drugs, I very likely am also the type of person who would disregard paying taxes.

11 Responses to “Taxing illegal activity”

  1. Drake Says:

    I think the idea of a dime bag with a tax stamp is kinda weird.

  2. Johnny - Oh Says:


    I think Randy has missed the point somehow. Doesn’t he see that we are already taxing the drug dealer’s? That is my primary argument against any kind of income tax for Tennesse. With a sales tax, it doesn’t matter where the money came from, if you purchase something legally, you are taxed on it. Always. Maybe he’s just setting this up as an elaborate sting operation. Anyone who comes in to pay taxes on their drugs, gets targeted for investigation, and soon is busted. I know that most people have a low opinion of drug dealers, but in my experience, they’re not that stupid.

  3. Johnny - Oh Says:

    Sorry Drake, that last was supposed to be addressed to Uncle.

  4. Drake Says:

    What cracks me up is the premise the department of revenue would hold confidential anyone who voluntarily pays the tax. We all know the government never lies, and that no pothead is ever, ever paranoid

  5. mike hollihan Says:

    It’s an old tool to fight illegal substance sellers. Remember, this was how Capone was busted during Prohibition, for tax evasion and not for selling illegal booze. It’s real hard to prove a drug dealer had the drugs with intent to sell if he’s surrounded by cronies to take the fall, but if he has them without a tax stamp, that’s open and shut! Plus, the State gets to fine the dealers for not having paid taxes and so collects even more money and property from them.

  6. mike hollihan Says:

    Oh, and there’s some Southern state that has printed “marijuana tax” stamps. I want to say Mississippi, since they have the research project on medical marijuana, but I remembeer seeing pictures of them a while back. I even remember some druggie dumbass showing up to buy some for his stash, so it would be legal.

  7. Drake Says:

    Yeah, Capone got busted for tax evasion didn’t he?
    Personally I think it’s like shooting fish in a barrel since most potheads probably aren’t in the field of tax accounting.

    I think it is a pretty sorry technicality to nail people on. Following the Capone example, it is not heartening to see all the other crimes he committed not resolved by their own merits.

  8. Thibodeaux Says:

    I know Louisiana considered doing something like this back in the late 80s, early 90s. I don’t know if it was ever implemented.

  9. Johhny - Oh Says:

    One thing about the tax stamps…what makes you think that each and every one of the packages the substance in question in shipped in, wouldn’t already have one before the product is even harvested. A little money changes hands, the stamp gets “lost”, and the dealers get away with it. (for awhile anyway) This whole thing still sounds more like a lot of “Sound and Fury” to me.

  10. Manish Says:

    Here’s an article which has more details of current marijuana taxes (and other strange taxes).

  11. Drake Says:

    That’s an interesting article Manish.