ABSTRACT
The Harrison Narcotics Act of 1914 is often cited as the law that made consumption of narcotics illegal in the United States. In reality, the Harrison Act only imposed very modest selective excise taxes on the sale of narcotics such as opiates. What was made illegal was the possession or sale of untaxed narcotics. Public policy against marijuana began in a similar fashion with passage of the Marijuana Tax Act in 1937.1
Selective excise taxes such as these inevitably lead to crime, however, as individuals attempt to avoid the tax through black markets, smuggling, and the violent forms of competition and contract enforcement that accompany such activities. An excise tax may reduce legal transactions in the product that is being taxed, but as occurred with narcotics and marijuana, it simulta neously creates new problems that are often much more costly for society. However, rather than recognizing of the proximate cause of the crime and eliminating of the taxes, full-blown criminalization of possession and sale of narcotics and marijuana evolved as bureaucrats who were given the authority to police these markets and collect the taxes propagated the belief that it was the “sin” of drug consumption that produced the crime, rather than the incen tives to avoid the taxes being imposed on the “sin.” This chapter’s purpose is to demonstrate that bureaucratic self-interest and predatory public finance in the form of explicit or implicit selective taxes have been and continue to be the primary determinants of public policy in the area of illicit-drug control.
