explain the The Marihuana Tax Act of 1937 to me

[scm1001]

I was trying to make sense of the The Marihuana Tax Act of 1937 (online here The Marihuana Tax Act of 1937 - Full Text of the Act ). It seems legal to sell it as long as one registers and pays the nominal tax. Where was the catch to make it effectively illegal?

[friedo]

The 1937 Act did not make marijuana (or marihuana if you’re old-tymey) illegal, although it did introduce significant penalties for those who did not obey the tax regulations. In fact, the US government even encouraged the production of hemp during World War II.

The Controlled Substances Act of (I think) 1970 is what outlawed weed entirely in the federal system.

[UltraVires]

They said on the History Channel (I know) that they wouldn’t issue the tax stamp until you had the marijuana in your possession. But if you had the marijuana in your possession, they would bust you for not having the tax stamp…

[Spoons]

As I understand things, the “catch” is that the US government doesn’t really have the power to declare any substance illegal. Not being mentioned in the Constitution, marijuana control (and alcohol control, for that matter) is reserved to the states under the Tenth Amendment.

So what does the US government do when it wants to make a substance effectively illegal but is constitutionally prohibited from doing so? It either works with the states to pass a constitutional amendment (which, as Prohibition proved, raises a whole host of other problems), or it taxes and regulates the substance. Taxes (and any attendant regulation) are something that the US government can constitutionally control, and this is what it attempted to do with the *Marijuana Tax Act *of 1937. It levied taxes and created a lot of regulations intended to discourage importation, production and consumption of marijuana for smoking purposes.

Ah, you say, you’re just a casual marijuana smoker, not an importer or producer or doctor or any other listed profession, and you don’t want to put up with the registration and bureaucracy? That’s okay, you can simply pay a higher tax. From the OP’s link:

@Marihuana Tax Act 1937

SEC. 7. (a) There shall be levied, collected, and paid upon all transfers of marihuana which are required by section 6 to be carried out in pursuance of written order forms taxes at the following rates:

(1) Upon each transfer to any person who has paid the special tax and registered under section 2 of this Act, $1 per ounce of marihuana or fraction thereof

(2) Upon each transfer to any person who has not paid the special tax and registered under section 2 of this Act, $100 per ounce of marihuana or fraction thereof.

One hundred dollars in excise tax for each ounce or less if you’re not paid up and registered! At a time when a quarter could buy you coffee, a streetcar ride, and a pay phone call, and still leave you with change; a $100 tax would be prohibitive to the casual marijuana smoker who hadn’t registered and paid up. And as pointed out, it also gave the US government a reason to bust as “tax evaders” those who were in possession of untaxed marijuana.

Of course, the states could (and did) eventually make marijuana illegal on their own, thus making the MTA of 1937 effectively useless–after all, even if you followed all the regulations to the letter and paid whatever federal tax on marijuana applied to you, you could not find a state in which you could legally possess and smoke your marijuana. But the MTA’s goal was never to raise tax funds; its goal was to stop the recreational use of marijuana through excise taxes and plenty of paperwork and regulation. Subsequent state laws that criminalized marijuana made sure that this US government objective was eventually (and constitutionally) achieved throughout the US.

I am unsure how the Controlled Substances Act 1970 works or is constitutionally valid, but the above was how an American professor of law answered a question similar to the OP’s in a talk I attended at a law school last year.

[Freddy_the_Pig]

@Spoons

One hundred dollars in excise tax for each ounce or less if you’re not paid up and registered!

And to make it even worse, read the fine print:

Such tax shall be paid by the transferee at the time of securing each order form and shall be in addition to the price of such form. Such transferee shall be liable for the tax imposed by this section but in the event that the transfer is made in violation of section 6 without an order form and without payment of the transfer tax imposed by this section, the transferor shall also be liable for such tax.

In other words . . . say you were a doctor or dealer determined to operate on the up-and-up, and you registered and paid the smaller dollar-an-ounce tax. If any one of your customers or clients failed to register, give you the proper order form, and pay their tax you were liable for the full $100 per ounce as well.

Needless to say under these conditions few people registered.

The provisions were designed to work in tandem with state law. All states already had some prohibition against marijuana in 1936, but per Harry Anslinger,

All of the states now have some type of legislation directed against the traffic in marihuana for improper purposes . . . There is unfortunately a loophole in much of this state legislation because of a too narrow definition of the term. Few of the states have a special narcotic law enforcement agency and, speaking generally, considerable training of the regular polce officers of the states will be required together with increased enforcement facilities before a reasonable measure of effectiveness under the state laws can be achieved.

As a result the federal government was urging the adoption of a uniform state prohibition law:

The uniform state narcotic law has now been adopted by some 35 states, many of these including cannabis or marihuana within the scope of control by that law. However, it has been recently learned that the legislative definition of cannabis in most of these laws is too narrow, and it will be necessary to have the definition amplified in amendatory legislation in most of the states, to accord with the definition in the pending Federal bill. . . . The Bureau of Narcotics, under the Marihuana Taxing Act, would continue to act as an informal coordinating agency in the enforcement of the uniform state law, exchanging information as between the respective state authorities in methods of procedure and attempting to secure true uniformity in the enforcement of the act in the various states which have adopted it.

Note another provision of the federal act:

SEC. 11. The order forms and copies thereof and the prescriptions and records required to be preserved under the provisions of section 6, and the statements or returns filed in the office of the collector of the district under the provisions of section 10 (b) shall be open to inspection by officers, agents, and employees of the Treasury Department duly authorized for that purpose, and such officers of any State, or Territory, or of any political subdivision thereof, or the District of Columbia, or of any insular possession of the United States as shall be charged with the enforcement of any law or municipal ordinance regulating the production, sale, prescribing, dispensing, dealing in, or distributing of marihuana.

So in other words, if you registered, you were advertising to your friendly state narcs that you were breaking state law.

[Koxinga]

I believe the state tax stamps make for popular collector’s items.

Don’t know about the federal law, but I remember the Texas tax stamp law was advertised by officials at the time as another way to bust druggies.

[scm1001]

Thanks. Follow up question for ten. If it is not constitutional to ban substances such as alcohol on a federal level, then how can the CSA act 1970 be constitutional?

[Markxxx]

Congress can regulate interstate commerce so that gives them a lot of sway 'cause very few things are solely limited to one state

[Procrustus]

@scm1001

Thanks. Follow up question for ten. If it is not constitutional to ban substances such as alcohol on a federal level, then how can the CSA act 1970 be constitutional?

bastards on the supreme court have no intellectual integrity. (and you can tell them I said so)