Excise Tax as Related to Illegal Drugs: Excise - Wikipedia, the free encyclopedia

Excise - Wikipedia, the free encyclopedia: Monies raised through excise may be earmarked for redress of specific social costs commonly associated with the product or service being taxed. Tobacco tax revenues, for example, might be spent on government anti-smoking campaigns.





Excise duties or taxes often serve political as well as financial ends. Public safety and health, public morals, environmental protection, and national defense are all rationales for the imposition of an excise.




Public safety and health

• deter individuals from harming their health by abusing substances such as tobacco and alcohol, thus making excise a kind of sumptuary tax, or
  
• deter them from engaging in morally objectionable activities such as gambling and prostitution (including solicitation and pimping) – thus making it a type of vice tax or sin tax
  
  

Environmental protection

• deter individuals or organizations from harming the general environment, including curbing activities which contribute to pollution, or which harm the natural environment.
  

Defense

• including taxation directly levied on other countries' militaries and/or governments, such as the UK's taxation on "visiting forces"
  
  

Punitive

• Many US states impose taxes on illegal drugs,[6] while the UK government imposes excise on money laundering and on "visiting forces" (which can be construed to mean occupying military forces). These taxes are not considered revenue sources, but rather exist to allow governments greater leverage for punishments and reparations/war reparations – based around the concept of tax evasion – which can be imposed in the event that the perpetrator is caught and tried.

Tobacco, alcohol and gasoline

These are the three main targets of excise taxation in most countries around the world. They are everyday items of mass usage (even, arguably, "necessity") which bring significant revenue for governments. The first two are considered to be legal drugs, which are a cause of many illnesses (e.g. lung cancer, cirrhosis of the liver), which are used by large swathes of the population, with tobacco being widely recognized as addictive. Gasoline (or petrol), as well as diesel and other fuels, meanwhile, despite being indispensable to modern life, have excise tax imposed on them mainly because they pollute the environment and to raise funds to support the transportation infrastructure.

Narcotics

Many US states tax illegal drugs.^[6]



An excise duty is applied by the affixation of revenue stamps to the products being sold. In the case of tobacco or alcohol, for example, the producer buys a certain bulk amount of excise stamps from the government and is then obliged to affix one to every packet of cigarettes or bottle of spirits produced.



A government-owned alcohol monopoly is another way to ensure payment of the taxes.



Criticism



As far as illegal drugs are concerned, it has also been argued that, by taxing banned substances, some US states are able to gain revenues, while the legislation protects the anonymity of the dealers –

A dealer is not required to give his/her name or address when purchasing stamps and the Department is prohibited from sharing any information relating to the purchase of drug tax stamps with law enforcement or anyone else.^[6]