[richlevy]

Originally Posted by BigV

I'm reminded of the Fed case against Al Capone. He was found guilty of tax evasion, essentially that he had failed to report the income. Naturally this is a crime that the Feds would want to prosecute. But there wasn't any prosecution of the crimes that generated the income.

Yes, and this has resulted in another bizarre legislative item in the War on Drugs - The Marijuana tax stamp.

In order to make the case that illegal marijuana growers were given the opportunity to pay taxes on their illegal crop, the government in 1937 passed a tax act that taxed marijuana (or marihuana), even though it was illegal. In 1969, the court ruled that this violated the 5th amendment by forcing a person to admit to a criminal act (thanks to Timothy Leary).

This has not stopped states from getting into the game. Many states have recently passed similar laws, some of which have withstood constitutional challenges. I'm just guessing but possibly the thinking was that since states did not enforce federal drug laws there would be no direct self incrimination (I am not a lawyer and this is just speculation). What would be interesting is if the marijuana was for medical use and the state did call in the Feds, would they be violating HIPAA?

Update: I was close. The Oklahoma Tax Law that survived the challenge in theory granted immunity from state prosecution. This, coupled with the theory that the person buying the stamp did not have to prove that he was the possessor of the substance gave the court enough room to conclude that the law did not violate the 5th. Of course in the real world, the idea that someone could walk in, buy one of these stamps, and walk out without being subjected to any official scrutiny is ridiculous.