SPITZER 'CRACK TAX' PROTECTS DRUGGIES

By KENNETH LOVETT Post Correspondent

January 24, 2008 -- ALBANY - Dealers and users who pay a proposed state levy on illicit drugs - dubbed the "crack tax" by critics - would not be turned over to police by tax officials under a plan being pushed by Gov. Spitzer.

Spitzer, in his 2008-09 budget proposal unveiled Tuesday, said he wants to create a tax stamp for illegal drugs, similar to such stamps used for cigarettes, which he says would raise $13 million in the coming fiscal year and $17 million annually after that.

According to a memo explaining the eyebrow-raising proposal, "The bill contains a unique and strict secrecy requirement, preserving the confidentiality of any information obtained from a dealer."

Disclosure of the information in some cases would be allowed for a criminal or civil proceeding involving taxes.

But "the bill specifically provides that none of the information may be used against the dealer in any criminal proceeding [other than a tax crime] unless it has been obtained independently," the memo said.

Dubbing it the "crack tax," state Sen. Martin Golden, a Brooklyn Republican and former city cop, called Spitzer's plan "another pie-in-the-sky idea that really has no legitimacy, and hopefully is not a first step toward legalizing drugs."

The plan, modeled after one in North Carolina, would require arrested drug dealers or users to purchase different tax stamps from the state.

"Upon receipt of the product, the dealer must affix enough stamps to the packages of marihuana [as it's spelled in official state legislative documents] or the controlled substance in order to show the tax has been fully paid," according to the proposal.

A tax stamp for marijuana would cost $3.50 per gram, while one for a controlled substance, "whether pure or dilute[d]," would be $200 per gram.

Experience in other states shows that stamp collectors, not drug dealers, are the ones purchasing the tax stamps.

The taxes and any applicable fines and penalties in those states are typically collected after a person is charged and their drugs seized by police.

Spitzer aides said they realize it's highly unlikely any drug dealers would come forward to purchase tax stamps.

That is why, they say, the governor's proposal requires "prompt notification" of the tax commissioner by law-enforcement agencies and DAs "who obtain any information that indicates that a dealer has failed to pay the tax due."

kenneth.lovett@nypost.com

http://www.nypost.com/seven/01242008/ne ... 769679.htm