Spitzer’s Crack-Pot Tax

Governor Eliot Spitzer has already built himself quite the record in his first term running New York. He has conducted a politically-motivated investigation of his main opponent in the state legislature and then co-opted the man supposedly investigating him, and he briefly demanded that illegal immigrants get drivers licenses. Now he wants to raise taxes in order to help solve a massive deficit — but you’re not going to believe how he wants to do it:

If you can’t beat it, tax it.
That seems to be the axiom in New York these days, where Gov. Eliot L. Spitzer (D), 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 are asking what the governor has been smoking.
“I guess if it moves, he’ll tax it,” said Republican state Sen. Martin J. Golden, who dubbed the proposal “the crack tax.” Some opponents said that because cocaine and weed would be subject to the new levies, it should more aptly be called “the crack-pot tax.”

On the other hand, Democrats in the state legislature … well, they can’t believe it either. One member from Harlem wondered how anyone could practically collect tax from dealers who operate mainly to support their own habit. Many of them steal just to afford the drugs; they’re not going to have a lot of extra cash lying around when the tax collector comes to garner the proceeds.
Other states have passed similar laws, but the intention in those cases was never to generate a reliable revenue stream. The laws got passed in order to have another set of charges to press when prosecuting drug dealers, making confiscations more palatable. In many cases, they have been thrown out or neutered for 5th Amendment reasons, ie, one cannot be required to admit to illegal activity to comply with another law.
Only Eliot Spitzer has seriously proposed that the state of New York could help make up its budget deficit through tax stamps on nickel bags. If he thinks that creating a new tax regime and enforcement mechanism on illegal drugs will bring in more money than it costs, then Spitzer must really be smoking something tax free at the moment.