Venture into any major supermarket and one section will almost always eclipse the others. Produce can be big but that’s not it. Nor is it the bakery, meat or dairy. No, the largest department taking up multiple aisles and refrigerated cases is alcohol. Between endless varieties of spirits, beer and especially wines, it is the epicenter of most stores. Due to local, state and federal taxes it’s arguably also the most profitable.
I’ve been told visitors from countries where liquor is banned are flabbergasted when they see the hundreds of bottles, cans and cartons of alcohol.
If we climb in our “WayBack Machine” to 100 years ago right now, we might feel the same. That would have been 1922 – the heart of prohibition in the US. Prohibition banned the manufacture, transportation and sale of intoxicating liquors. Known as the “noble experiment,” the purpose was to reduce crime and the cost of prisons and poorhouses while improving health in America. In truth, it did the opposite creating an underworld of bootleggers and violent gangsters....
By 1933, people realized what a colossal failure prohibition had been. It was repealed. To assure issues related to organized crime were eliminated, the government stepped in and gave themselves the final say-so on anything alcohol-related, particularly tariffs. In effect, the “Feds” took over where the gangsters left off. Uncle Sam just did it with taxes instead of machine guns.
To prove taxes had been paid, the government created stamps to be applied to any bottle, keg or container of alcohol. They did so too for cigarettes, playing cards, patent medicines and even matches (in the age before electricity when matches were vital to create fire).
These weren’t ordinary stamps. US tax stamps were veritable works of art, intricately detailed to thwart counterfeiting. Not surprisingly, there is huge collector interest in those vintage stamps today. Some that survive are worth many thousands of dollars.
More topical today is the marijuana industry. Considered the “killer weed” in the 1960s and ‘70s, marijuana is now amazingly (some might say “finally”) becoming mainstream. Medical marijuana has become legal in 38 states. 18 of those states have legalized recreational marijuana for getting high.
No different than alcohol after prohibition, state and federal governments are already counting the marijuana tax dollars sure to be generated. With the stratospheric amount of that prospective tax revenue, it’s just a matter of time before all 50 states climb on board and fully legalize it.
This isn’t a first. Given the aversion to marijuana a century ago, it may sound implausible that the government once sanctioned it. Cannabis /hemp had been sold “over the counter” since 1906. In addition to people smoking it, the hemp plant itself was recognized as a source of rope fiber and plant material that could potentially compete with pulp wood in the manufacture of paper. The government couldn’t ignore that source of revenue.
But wait! Newspaper magnate William Randolph Hearst had invested in tens of thousands of acres of forests to supply the wood pulp needed to print his papers. Because low-cost hemp threatened to financially devastate his timber holdings, Hearst is said to have coerced some in government to apply excessive taxes to assure paper would continue to be made from (his) wood.
In 1937, the federal government overprinted a number of its Documentary revenue stamps with the wording, “Marihuana Tax Act of 1937.” Those stamps signified substantial taxes had been paid. Afterward, they were applied to bundles of hemp.
Today, collectors pay hundreds of dollars for just one of those tax stamps. A pane of four in their original cardboard booklet has a value of $15,000.
Tax stamps on countless products have certainly changed with the times. Many are simply stamped on in ink (as on the bottom of a pack of cigarettes), or non-descript tabs over the top of a bottle of liquor. How they will appear on packs of marijuana is anyone’s guess. Moreover, will marijuana someday be on the shelves in supermarkets? Only time will tell.
One given is it will be taxed. After all, people have long maintained the only sure things are death and taxes. Because so many were sure they would be dead before marijuana ever became legal (and taxed) it appears there is truth to that.
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