One can never underestimate the enthusiasm that politicians have for trying to hunt up tax revenues. The creativity of some politicians can lead to bizarre taxes and unfortunate results.
Taxes on Illegal Drugs
One argument for the legalization of various narcotics is that massive tax revenues would be created. Interestingly, a few states already are trying to collect such taxes!
More than 10 states have tried to tax people that possess illegal drugs. For example, Kansas levies a drug tax on dealers as soon as they take possession of the substance. To avoid prosecution for failure to pay the drug tax, individuals possessing the drugs are supposed to purchase "drug tax stamps" and attach the stamps to the drugs in question. The stamps are valid for 3 months.
In an apparent attempt to promote compliance, the Kansas Department of Revenue promises:
"A dealer is not required to give his/her name or address when purchasing stamps and the Department is prohibited from sharing any information relating to the purchase of drug tax stamps with law enforcement or anyone else."
The tax is levied on cocaine, marijuana, methamphetamines and other hard drugs. Interestingly, the state collected over $300,000 in such taxes by going after individuals that were charged with criminal activity. This is better known as the "Al Capone Theory", which is derived from the fact that authorities were able to put away the famous mobster on tax evasion charges. Alas, criminal prosecutors have not always welcomed the illegal drug tax.
Drug Tax Foils Prosecution of Drug Dealers in Texas
The 5th Amendment of the Constitution protects Americans from being punished twice for the same crime. This concept, known as "double jeopardy", caused prosecutors in 1989 to literally beg the state comptroller's office to stop accepting tax payments by drug dealers. The reason? A Texas Criminal Court of Appeal ruled that the state law assessing taxes on illegal drugs constituted a "punishment". As a result, requiring the payment of the tax constituted double jeopardy if the taxpayer had already been charged criminally.
In an attempt to get their clients off on drug charges, criminal attorneys began advising them to rush to pay their drug?related taxes. The theory was that once the taxes were paid, the drug dealer could not be prosecuted because doing so would constitute a second punishment! The appellate court agreed with the theory and the state comptroller immediately stopped collecting the Texas drug tax.
Richard Chapo is CEO of http://www.businesstaxrecovery.com - Obtaining tax refunds for small businesses by finding overlooked tax deductions and credits through a free tax return review.
Marketing is a necessary expense in running practically any business... Read More
IRS Tax forms can be confusing.Am I a 1099 or... Read More
Own residential rental properties? This article discusses how income from... Read More
"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More
The United States is a nation of entrepreneurs. There are... Read More
Let's assume that you would like to begin saving for... Read More
Hit a big one? With more and more gambling establishments,... Read More
As a sole proprietor, it's wise to familiarize yourself with... Read More
The powers of Congress, and the limitations set upon those... Read More
In a past article I relayed the plight of the... Read More
Whether helping the kids with a down payment on their... Read More
While there are many equally valid reasons to incorporate, saving... Read More
NOTE: This is the first in a series of 5... Read More
Import duties continue to be significant elements in the cost... Read More
If you have recently started an Internet or home business,... Read More
Many taxpayers are confused about how long they should keep... Read More
Q: I was contacted by the city tax collector to... Read More
The Sarbanes-Oxley Act, also called the Public Company Accounting Reform... Read More
You've been feeling uneasy (perhaps even guilty) because you've failed... Read More
Why a Corporation Helps Save You TaxesThe Tax Rates (Notice... Read More
Running a home based business reaps many wonderful tax deductions... Read More
Have you been thinking about incorporating your small business or... Read More
The federal tax code is complex. This complexity generally arises... Read More
The U.S. Department of Agriculture estimates that it costs nearly... Read More
Does this scene sound familiar? It's April 7. You haven't... Read More
The knock on the door from a Tax Inspector is... Read More
The Internal Revenue Service is reporting that the difference between... Read More
When buying a business, how the "purchase price" is made... Read More
As an employer, you must pay employment taxes if you... Read More
Ever wish that, as a business owner, you knew exactly... Read More
Over 50% of marriages end in divorce in the United... Read More
Many small businesses complain when confronted with the expense of... Read More
QUESTION: I have been contacted by my local city... Read More
As your business grows, you are going to need help.... Read More
Deduction of Refinance PointsAny points that you pay in the... Read More
1812The first attempt to impose an income tax on America... Read More
Have you been thinking about incorporating your small business or... Read More
One can never underestimate the enthusiasm that politicians have for... Read More
In elementary school, kids come up with creative excuses why... Read More
Statistics for IndividualsUnfortunately, the IRS increased its rate of auditing... Read More
We all love to criticize the IRS, don't we? And... Read More
Each year, the IRS lists various scams taxpayers get caught... Read More
All tax authorities to e-commerce transactions should investigate the record... Read More
Misconceptions, misinterpretations and just plain "untruths" are floating about income... Read More
With the massive losses caused by Katrina, the economy of... Read More
If you have employees, you are responsible for paying a... Read More
Recently, I stumbled across a concept that could change your... Read More
How Home-Based Businesses Can Avoid Giving Uncle Sam... Read More
Small Businesses Filing Amended Federal Tax Returns to... Read More
Many Americans believe that an IRS debt is a debt... Read More
The means and types of businesses have transformed with advent... Read More
Running a home based business reaps many wonderful tax deductions... Read More
The 100 year old investment-banking firm of... Read More
The knock on the door from a Tax Inspector is... Read More
The Internal Revenue Service has certified the 2006 Toyota Highlander... Read More
As a sole proprietor, it's wise to familiarize yourself with... Read More
IRS Tax forms can be confusing.Am I a 1099 or... Read More
Someone once said, 'the best way to calculate your taxes... Read More
In trying to comply with tax laws for your e-business,... Read More
You're at your office, or home, and the doorbell rings... Read More
Anyone who is closely related to an accountant knows that... Read More
All states also have their own tax system. Typically there... Read More
When buying a business, how the "purchase price" is made... Read More
Just image, you are a small manufacturing company, business has... Read More
The U.S. Department of Agriculture estimates that it costs nearly... Read More
Import duties continue to be significant elements in the cost... Read More
Tax |