N.Y. GOVERNOR FACES CRITICISM AFTER PROPOSING TAX ON DRUGS

That seems to be the axiom in New York these days, where Governor
Eliot L. Spitzer, 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 have expressed incredulity. "I guess
if it moves, he'll tax it," said Republican state Senator Martin J.
Golden, who dubbed the proposal the crack tax. Some opponents said
that because cocaine and marijuana 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 drug-tax laws still in effect 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 lesser
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 abuse. "It
was a way of getting tougher on criminals," said Joseph D. Henchman,
tax counsel for the Tax Foundation, a Washington 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, the state Supreme Judicial
Court ruled in 1998 that a drug tax was an unconstitutional form of
double jeopardy, so it is not used, although it remains on the books,
according to the Department of Revenue. Allen St. Pierre, executive
director of the National Organization for the Reform of Marijuana
Laws, called the drug tax a quintessential example of the absurdity
of the war on some drugs.

He said taxing drug dealers, and especially users, "is like squeezing
blood from a rock."