Skip to main content

Drug Penalties: New York Governor Proposes Tax Stamps -- $200 a Gram for Cocaine

Submitted by Phillip Smith on (Issue #520)
Consequences of Prohibition
Drug War Issues

As part of a massive just unveiled state budget, New York Gov. Eliot Spitzer (D) is proposing to require anyone who buys, sells, transports, or possesses "all marijuana and controlled substances" to have a "tax stamp" for the illegal substance. Spitzer's provision proposes a $3.50 per gram tax on marijuana, but a whopping $200 per gram tax for cocaine.

Iowa drug tax assessment, submitted
anonymously by a Chronicle reader --
click to enlarge in separate window

Under the proposal, the tax would be paid in advance of purchase by the "dealer," who would buy stamps from the state Department of Taxation and Finance, which he must then affix to the packages of drugs to show the tax has been paid. In the foreseeable event that dealers do not rush down to the tax office to pay up, the bill requires state police agencies and prosecutors to report any dealers who haven't paid their drug taxes to the department, unless reporting them would jeopardize a pending criminal investigation.

The governor's office said the tax would generate $13 million in the 2008-09 fiscal year, and $17 million a year after that. The revenues would be deposited in the state general fund. To be enacted, the move must be approved by the legislature.

In a Wednesday press release, Ethan Nadelmann, executive director of the Drug Policy Alliance, said he had his doubts about the bill. While Spitzer's proposal might be superficially appealing, New Yorkers would be better off taxing and regulating marijuana, he said.

While the idea of taxation is reasonable, he continued, "these tax stamp bills and laws smack of the gratuitous piling on of punitive sanctions that permeates the overall drug war." In addition to arrest and imprisonment, drug violators already face all sorts collateral consequences, and imposing the drug tax as yet another burden would "end up causing more harm than good," he said. Nadelman went on to point out that Spitzer could save far more money for New York taxpayers by following through on his campaign commitments regarding reform of the Rockefeller drug laws.

And he took the opportunity to push for fundamental reform of the marijuana laws. "[Q]uite frankly, New Yorkers would most benefit from a serious proposal to tax, control and regulate marijuana more or less like alcohol is today," he said. "Even though New York decriminalized marijuana possession in the 1970s, it still arrests people for that offense more frequently than most states that never decriminalized it. New Yorkers spend many tens of millions of dollars per year for this foolish excess, when instead the state could earn even greater amounts from taxing this ever popular consumer product. Overall consumption would likely rise only modestly given the widespread and easy availability of marijuana today notwithstanding its illegality. Virtually all New Yorkers -- both those who like marijuana and those who have no interest in it -- would benefit."

Bizarrely, Sen. Martin Golden, a former NYC police officer and a Republican from Brooklyn, criticized the drug tax from the opposite direction. Golden told the New York Post, "another pie-in-the-sky idea that really has no legitimacy, and hopefully is not a first step toward legalizing drugs."

Verenda Smith, government affairs associate at the Federation of Tax Administrators, told the New York Times that states need to create an at least theoretical opportunity for drug sellers to pay the tax legally, such as anonymous purchase, for it to be constitutional.

According to the Spitzer administration, 29 states have already passed laws imposing drug taxes. But several of those laws have been challenged, most recently in Tennessee, where a state appeals court ruled last September that the state's drug tax law was unconstitutional because the state cannot tax something it declares illegal.

Permission to Reprint: This content is licensed under a modified Creative Commons Attribution license. Content of a purely educational nature in Drug War Chronicle appear courtesy of DRCNet Foundation, unless otherwise noted.


Anonymous (not verified)

The re-legalization of marijuana should not include any revenues by way of a tax to any government agency!

All governments are little more than coercive self-serving criminal organizations, and prohibitionists and the tools that support them, deserve long prison or death sentences for their war crimes... not more of our legally acquired money!

Remember: Prohibition is against Constitutional Law. Prohibition, in the name of regulation is no less illegal, and those prohibitionists that blatantly ignore the law and thus supportiong violent crimes should have their rights violently denied as well.

If a tax were to be imposed, it should be totally voluntary, and the proceeds should go only to the victims who were unlawfully prosecuted and detained. Additionally, all major war criminals like politician prohibitionists, drug czars, judges & prosecutors, drug task forces, etc... shall forfeit their assets ... whether or not they survive their arrest... I prefer they didn't!

Even Ed Rosenthal, a peace loving man from what I can tell, considers the actions of the fed gov't as war crimes!
Well Ed, I love ya, but dah.... telll me something this libertarian hasn't known for decades.

The big question is: How much longer will we tolerate these intolerant war criminals... before we act in a manner that violent people understand?

Just Say No... To Gods & Gov'ts!

Fri, 01/25/2008 - 1:56pm Permalink
Anonymous (not verified)

I agree with you to apoint i'm not sure advocating violence will help us in our battle but your point is well taken. Our goverement doesnt have the slightest problem using Violence against the populace. I recently changed my political affilliation from Republican to Libertarian. I have felt for some time our governement is not acting on the will of the people and the politicians have forgotten they are public servants!
I am encouraging anyone who will listen to register as independant to get the point across the the two major parties that they have not been working in their constituants behalf. If enough voters change to indeoendants maybe they will get the message.

Fri, 01/25/2008 - 2:32pm Permalink
Anonymous (not verified)

the only thing i can think of is maybe its so expensive because it will be a pure (or nearly pure since coke can't be used recreationally 100% pure) product...

Sat, 01/26/2008 - 1:35am Permalink
aahpat (not verified)

While Spitzer is simply being an asshole, I am glad that Ethan Nadelmann got on top of this quickly. It is an opportunity to explore the alternatives and consider what existing institutions could be employed to quickly bring about an end to prohibition.

These taxing schemes are admissions by politicians that they see the potential revenue that they themselves are depriving their communities of today. It is up to us to give our communities some perspective of what the politicians are denying them.

New Yorkers should be writing letters to the editor right now about these taxes.

Here is a link for US Illicit drug market
value calculator

It is based on the U.N.'s most recent world retail market value estimates of $ 322-billion a year, of which they say the U.S. is 44% or $ 144-billion. It has per capita for the U.S. and has a link for the census so that you can get your local population and calculate the value of the retail drug market in your community or state. While the U.N. estimate is not perfect it helps provide perspective based on sources accepted by the broader American community.

Sun, 01/27/2008 - 10:43am Permalink

Add new comment

The content of this field is kept private and will not be shown publicly.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.