DRUG DEALERS FACE NEW TAX

Drug dealers face new tax Idea might sound goofy, but it really makes sense
in the end.

The fact that Tennessee is going to require drug dealers to pay state
excise tax on their illegal substances sounds, well, goofy at first. If you
are a drug peddler, why in the world would you decide to become a
law-abiding citizen when it comes to taxes -- even if the government says
that state tax collectors would be constrained by taxpayer privacy laws
from reporting them to police.

The reality is that the drug dealers won't be paying the tax, at least not
before the fact. When the police make drug busts, they will inform tax
officials. The tax collectors will then assess the tax on the drug suspects
as well as a fine for not paying the tax.

If the accused don't have enough money to pay the tax and fines, property
and other assets will be seized.

The law enforcement agency that makes the initial bust will get
three-fourths of what was collected, and the rest will be deposited into
the state's general fund.

How much will this all cost drug dealers? The tax on cocaine, for instance,
is $50 per gram. Marijuana (other than stems and stalks) will be $3.50 per
gram. Moonshine sold by the drink will be $31.70 per gallon.

While one wonders how well this might all work in real-life applications,
supporters of the new law say that more than half of the states already tax
illegal drugs.

Tennessee modeled its law on North Carolina's tax program. It has collected
$83 million in the 14 years it has been on the books. Last year, that state
collected $8.5 million on the drug tax and has brought in $4.9 million
since July 1.

If this new tax helps to fight the war on drugs and bring in new revenue,
then it will be deemed a success. It's one of those programs where we will
just have to wait and see how it all works out.