You can't cheat death and taxes...

Many socially liberal types have said we should legalize drugs and then tax them.  But what about keeping them illegal... and still taxing them?  Tennessee is doing just that:

Basically, drug dealers are supposed to pay taxes on illegal drugs and alcohol.

They pay confidentially, and when they do, they get a stamp.

If they're caught without the stamp, they'll be prosecuted for not only selling drugs, but for not paying their taxes too.

I'm no expert on constitutional criminal law or suppression of evidence.  Heck, I'm not even a lawyer.  Nonetheless, to my nose, this law reeks of unconstitutionality under the 5th and 14th Amendment protections against self-incrimination.

Now, I know what you might think... isn't this how they nabbed Al Capone?  Well, not exactly.  Capone had income from crime, and he didn't pay taxes.  You still have to pay taxes, even if your income is ill gained.  But Capone only went to prison for tax evasion, not for his many other crimes.  And his failure to pay taxes was never used as evidence of his other crimes.

This sounds different, at least on the surface.  Even if you can get the tax stamp anonymously, having one in your possession is, on its face, a confession that you know you are making money selling drugs, which is illegal.  So it seems to me that not having such a stamp, or even having it but concealing it from the cops when you are busted for dealing, is within your constitutional right to remain silent.

Imagine this: you are caught with a bag of dope hidden in your backpack.  This alone is pretty damning evidence against you.  But you truthfully didn't put the dope there; someone else saw the cops coming, stuffed the dope in your bag without your knowledge, and set you up as a patsy.  Now, the cops ask you if you have your tax stamp.  You don't have one, because you weren't planning on making a profit dealing.

Ah, but now you say that since you weren't making money, you are off the hook for the taxes, right?

OK, now what happens if you get busted, but WERE actually knowingly holding the dope with intent to sell, but you claim you are an innocent victim.  Well, you are innocent until proven guilty, and in a system of law, we must follow the law.  The state must prove your guilt.  If you did pay your taxes and have your stamp, that is evidence the state can use to prove your intent.  So should you be able to remain silent, and not tell them you have a stamp?  But then so doing prevents you from raising a defense against the tax charge.

If the state has other evidence problems against you, such as an illegal search and seizure of the drugs, they may have a weak case on the drug charge.  But by holding both a drug charge AND a tax charge over your head, they can pressure you into showing them your tax stamp to get one charge dropped, which would then be an essentially coerced confession on the other.

I have no answer to this.  Maybe a real lawyer can write in...

Comments

[pril]

Arizona and Idaho have a similar program. Gordon over at Roguepundit (http://roguepundit.typepad.com/roguepundit/2006/01/taxing_illegal_.html ) has a recent entry about something like it being pondered in Washington.

This kind of thing is getting a lot of attention lately, but i know the AZ law has been in place for at least 15 years.

[john]

The self incrimination argument is interesting. I don't think it would fly, but I couldn't say conclusively without doing some research.

I think there's a similar law on the federal books. I know some people who have filed for some form of tax stamp for marijuana distribution -- for ornamental purposes.

A larger issue lurks within this, and that's the trend (both federal and state) to turn endlessly divide single criminal acts into multiple crimes, subject to multiple sentences. The courts have developed a variety of doctrines that allow them to turn a blind eye to the double jeopardy concerns raised by such legislation and charging practices.

[Brian B]

I don't think the Self-incrimination angle will work, because it's so simple to address: the stamp is just not admissible as evidence in a court of law.

John raises a more interesting point regarding double jeopardy. I'm not sure I agree with it, but it certainly does require some consideration.

[Andy]

This is not unique to any one state. I know when I was at college someone was arrested for marijuana possession (in IA) and the charge for the actual possesssion was a misdemeanor because it was a small amount but they were then hit with and later convicted a "Failure to Posess the proper tax stamp", which is a D Felony (the lowest level felony in IA) and ended up getting 90 days in jail for posessing a small amount of pot.