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Budget Problems Prompt NY Governor To Consider Crack Tax

New York Governor Eliot Spitzer is pushing a tax on illegal drugs as a way to help close the huge budget gap his administration faces. The proposal though seemingly serious has been widely mocked.

The San Francisco Chronicle reported on Feb. 18, 2008 ("Spitzer Wants NY To Tax Illegal Drugs") that "If you can't beat it, tax it. That seems to be the axiom in New York these days, where Democratic Gov. Eliot 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."

According to the Chronicle, ""I guess if it moves, he'll tax it," said Republican state Sen. Martin 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 remaining drug-tax laws are used mainly by local law enforcement agencies as a way to seize drug money and fund counter-narcotics operations."

The Chronicle noted that "In New York, Spitzer proposed the drug tax in his 2008-09 budget as a way to deal with a projected shortfall, and in a memo said taxing drug dealers would raise $13 million in the coming fiscal year. The governor's office said the bill would contain strict secrecy requirements, so drug dealers who paid their taxes would not be incriminating themselves. A tax stamp for a gram of marijuana would cost $3.50, and $200 for a gram of cocaine, 'whether pure or diluted,' according to the governor's proposal."

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