An unintended consequence of alcohol taxes?

The United States did not tax alcohol between the end of the War of 1812 and July 1, 1862, when it started on a path of taxing the heck out of alcohol.  “[T]he importation of opium specially prepared for smoking purposes, which did not exist in 1865, has in latter years increased enormously; rising from 12,554 lbs. in 871 to 77,196 lbs. in 1880, and 298,153 lbs. in 1883; paying in the latter year a customs revenue of nearly two millions of dollars. The preparation of opium for smoking finds its way into the country mainly through the port of San Francisco, and its consumption has hitherto been supposed to be almost wholly restricted to Chinese residents ; but the circumstance that the increase of import has been of late in a ratio so far in excess of any ratio of increase in Chinese immigration suggests a probability that the vice of opium-smoking is finding favor and adoption with the native American.” David A. Wells, Practical economics: a collection of essays respecting certain of the recent economic experiences of the United States, G. P. Putnam’s Sons, New York, 1888, at 188, online at http://archive.org/stream/practicaleconomi00well#page/n5/mode/2up

There were no national laws about opium until 1890, when a tax of $12 per pound was imposed on “opium prepared for smoking.” 26 Stat. 567, 569,

http://constitution.org/uslaw/sal/026_statutes_at_large.pdf

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Author: patoglesby

From 1982 to 1990, I worked in tax policy for Committees of the United States Congress. In recent years, I was Adjunct Lecturer at UNC-Chapel Hill's Business School and then Adjunct Professor at its Law School.

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