Take this drug tax and...

click on image to enlarge in separate window This week saw some good news, when a Tennessee judge ruled that the state's "drug tax" -- a drug war revenue collection scheme in which people involved with illegal drugs are required to incriminate themselves by paying taxes, and can be billed after the fact for the tax plus penalties -- is unconstitutional. The ruling came in the case of Steven Waters of Knoxville, who was billed $55,000 in 2005 for a kilogram of cocaine that had been valued at $12,000. Scurrilously, the state intends to continue enforcing the tax as if the ruling never happened, for as long as they can get away with it. The drug tax notice posted here, from which we blotted out the personal information, was sent to us by one of our readers. The state of Iowa is prosecuting him and trying to take his family's house that they've owned since building it in 1876 -- obviously not built with drug money, as he pointed out. The tax, as you can see, is well over $100,000. Because the tax action is civil, not criminal, the level of due process he has available to him is much less -- no judge approved this notice, the revenue agency is just saying he owes them 136K and he better pay up. He hasn't even gone to trial yet, and the notice doesn't even specify the quantity or value of the marijuana. It looks like they treat drug taxes more harshly than other kinds of tax dealt with on the form, as it says "If this assessment is for drug taxes, you have 60 days to appeal, but you cannot pay the amount shown and then file a refund claim after repayment." Our friend claims his innocence, and he made the following argument in one of his emails to me:

"The pot that I am being taxed on was found in containers on my property which I couldn't see from my house. I had less than an ounce in my house. You would think if I were going to keep that much valuable pot just laying in the weeds where anyone could help themselves to it, I would have at least put no trespassing signs on my place, which I didn't."
"You should see the list of damage they did to my things," he added.

widely-distributed Tennessee drug tax stamp image While I haven't independently verified our reader's account, I believe him, and will continue to unless I learn reasons why I shouldn't. But it almost doesn't matter, because the laws and the punishments are so unjust in any case. And there's no question, if you want to frame someone, in this case maybe even get his house, there's no easier way to do it than with drugs. As he put it, "Pretty good way to rob someone, just put some containers of hemp on his place at night where he can't see it, then take what you want." And while we don't know if that's what happened, again, it almost doesn't matter, from a policy level at least, because it couldn't be easier to do, and therefore it undoubtedly does happen. We run police corruption stories in our newsletter every week, and this week we have a piece of misspending of asset forfeiture funds too. This case involves multiple issues. It involves asset forfeiture, it involves the drug tax, it involves the always unjust prohibition laws, and it demonstrates the potential at least for framing and abuse. Back in Tennessee, it also seems to involve the arrogance of an agency that thinks it can ignore a judge's ruling with impunity, and sadly is probably right. Since the issue of the week is drug taxes (thanks to an enlightened Tennessee jurist), I will conclude this time by saying, "take this drug tax and..."

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