Posts Tagged ‘tax’

U.S. Can’t Justify Its Drug War Spending: New Reports

2064027165_6b83996b8d_o.jpeg
Graphic: Break The Matrix

​Name one government program that for 40 years has failed to achieve any of its goals, yet receives bigger and bigger budgets every year. If you said “the War on Drugs,” you’ve been paying attention.

The Obama Administration is unable to show that the billions of dollar spent in the War On Drugs have significantly affected the flow of illicit substances into the United States, according to two government reports and outside experts.

The reports specifically criticize the government’s growing use of U.S. contractors, which were paid more than $3 billion to train local prosecutors and police, help eradicate coca fields, and operate surveillance equipment in the battle against the expanding drug trade in Latin America over the past five years, reports Brian Bennett of the Los Angeles Times.
“We are wasting tax dollars and throwing money at a problem without even knowing what we are getting in return,” said Sen. Claire McCaskill (D-MO), who chairs the Senate subcommittee that wrote one of the reports, which was released on Wednesday.

col_bruce bagley flip.jpg
Photo: Colombia In Context
Professor Bruce Bagley, University of Miami:
“I think we have wasted our money hugely”
“I think we have wasted our money hugely,” said Bruce Bagley, an expert in U.S. anti-narcotics efforts. “The effort has had corrosive effects on every country it has touched,” said Bagley, who chairs international studies at the University of Miami at Coral Gables, Florida.
Predictably, Obama Administration officials deny reports that U.S. efforts have failed to reduce drug production and smuggling in Latin America.
White House officials claim the expanding U.S. anti-drug effort occupies a “growing portion” of time for President Obama’s national security team, even though it doesn’t get many Congressional hearings or headlines.
The majority of wasted American counter-narcotics dollars are awarded to five big corporations: DynCorp, Lockheed Martin, Raytheon, ITT and ARINC, according to the report for the contracting oversight committee, part of the Senate Homeland Security and Governmental Affairs Committee.
Counter-narcotics contract spending increased by 32 percent over the five-year period from $482 million in 2005 to $635 million in 2009. Falls Church, Va., based DynCorp got the biggest piece of the wasted pie, a whopping $1.1 billion.
090311_mcCaskill_297.jpeg
Photo: Politico
Sen. Claire McCaskill: “We are wasting tax dollars and throwing money at a problem without even knowing what we are getting in return”
These contractors have plenty of ways to waste your tax money. They train local police and investigators in anti-drug methods, provide logistical support to intelligence collection centers, and fly airplanes and helicopters that spray herbicides to supposedly eradicate coca crops grown to produce cocaine.
The Department of Defense has wasted $6.1 billion of tax money since 2005 to help spot planes and boats headed north to the U.S. with drug payloads, as well as on surveillance and other intelligence operations.
Some of the expenses are “difficult to characterize,” according to Senate staff members, which is government-speak for “OK, you caught us wasting money again.” The Army wasted $75,000 for paintball supplies for “training exercises” in 2007, for example, and $5,000 for what the military listed as “rubber ducks.”
The “ducks” are rubber replicas of M-16 rifles that are used in training exercises, a Pentagon spokesman claimed.
Even the Defense Department described its own system for tracking these contracts as “error prone,” according to the Senate report, which also says the department doesn’t have reliable data about “how successful” its efforts have been. Go figure.
In a separate report last month by the U.S. Government Accountability Office, the investigative arm of Congress, there is the conclusion that the State Department “does not have a centralized inventory of counter-narcotics contracts” and said the department does not evaluate the overall success of its counter-narcotics program.
“It’s become increasingly clear that our efforts to rein in the narcotics trade in Latin America, especially as it relates to the government’s use of contractors, have largely failed,” Sen. McCaskill said.
The latest criticism of the United States’ War On Drugs comes just a week after a high-profile group of world leaders called the global Drug War a costly failure.
The group, which included former United Nations Secretary General Kofi Annan and past presidents of Mexico, Brazil and Colombia, recommended that regional governments try legalizing and regulating drugs to help stop the flood of cash going to drug cartels and other organized crime groups.
James Gregory, a Pentagon spokesman, demonstrated his willingness to lie his ass off by claiming the Defense Department’s efforts against drugs “have been among the most successful and cost-effective programs” in decades.
“By any reasonable assessment, the U.S. has received ample strategic national security benefits in return for its investments in this area,” said Gregory, who seems to inhabit a particularly improbable alternate reality.
Back in the real world, the only effects most objective observers can see run along these lines: Backed by the United States, Mexico’s stepped-up Drug War has had the unintended effect of pushing drug cartels deeper into Central America, causing violence to soar in Guatemala, Honduras and El Salvador.
Another effect has been the vast expansion of Orwellain surveillance technology, supposedly to combat drugs, but ever-so-useful to the authoritarian regimes in Central America (and in the United States) in suppressing dissent.
The U.S. is currently focusing on improving its efforts to intercept cellphone and Internet traffic (of “drug cartels,” yeah right) in the region, according to U.S. officials who spoke on condition of anonymity.
During a visit to El Salvador in February, William Brownfield, the head of the State Department’s anti-drug programs, opened a wiretapping center in San Salvador, as well as an office to share fingerprints and other data with U.S. law enforcement.

Town Reaps Tens of Thousands From Marijuana Dispensaries

5c0b855e9331e931b661f5ef27fa0130.jpeg
Photo: Anna Hiatt/Castro Valley Patch
Mason jars are used to keep the marijuana fresh at Alameda County’s We Are Hemp

​Tens of thousands of dollars in previously unclaimed taxes are headed back to the unincorporated Eden area of Alameda County, California, after two medical marijuana dispensaries were restored to local tax rolls.

We Are Hemp and Garden of Eden are the two dispensaries that, according to reporter Sonja Sharp at the Castro Valley Patch, “put Cherryland head and shoulders above Ashland and San Lorenzo in this spring’s cash-in-the-couch cushions bonanza.”
The cash in the couch cushions of which the Patch speaks is that found by local volunteers pounding the pavement for the Alameda County Redevelopment Agency, which had already uncovered some $72,000 in annual tax money “that had been falling into deeper pockets in San Leandro and Hayward.”
But that number, based on data provided by the agency, unintentionally omitted the dispensaries, the two biggest finds. Together, they boosted the newly discovered annual tax revenue about $160,000.
There are a few other businesses also left off the list that may push the total higher. But, according to Economic Development Director Bill Lambert, nothing comes close to the revenue from the two marijuana dispensaries.
“The pot clubs added about half,” he said.
The county has been working since last fall to recover sales taxes from what it initially believed might be only a handful of local businesses that had been misallocated to neighboring communities. Local volunteers discovered about 30 such businesses.
“In a community long divided over dispensaries, that’s welcome news,” noted the Patch.

Humboldt County Residents Plan Marijuana-Based City

Weed_City.jpeg
Photo: Cheebatech
Just go ahead and put me down as a permanent resident, man.
A group from southern Humboldt County, California is hoping to capture the independent, weed-friendly spirit of the area by creating a city that uses revenues from the local marijuana industry.
The Humboldt Emerald City Organizing Group is holding an informational fund raiser Sunday, May 15, for the formation of Emerald City, according to Jim Lamport with Lamport Legal Documents in Garberville. The event, begins about 1 p.m. at the Beginnings Octagon in Briceland, aims to inform the public while raising money to fund the incorporation process, reports Donna Tam at the Eureka Times-Standard.
Lamport said the group hopes the new city will benefit from sales tax related to its marijuana industry.

While Arcata and Eureka have adopted ordinances regulating medical marijuana grows, Humboldt County itself has yet to pass an ordinance. Lamport said he thinks the Emerald City Council would quickly take up the passing of an ordinance.
33at7k5.jpeg
Photo: PhoenixPharmer
A juicy bag of primo local product, Humboldt County Kush. Could this cash crop support a cannabis-friendly Emerald City?
​ “The rural southern part of the county is socioeconomically different from Arcata or Eureka, or Rio Dell or Fortuna,” Lamport said. “Currently, we’re lumped in politically with all the vast unincorporated areas of the county to the extent that we feel the need for greater local representation.”
The group needs about $7,500 for the first steps of the incorporation process, including an initial feasibility study, a preliminary analysis of available revenue sources for a potential city, and how any financial gaps might be filled.
The group would need to file a formal application with the Local AGency Formation Commission (LAFCO), which decides if an area has the fiscal capability and community support to form a new city.
The preliminary boundary of Emerald City, which LAFCO helped draw up, includes areas of Garberville, Redway and Benbow, including the Garberville Airport.
“They need to show where the money is going to come from because as a city, they would be responsible for a range of services and those services will need to be clearly defined,” said LAFCO Executive Officer George Williamson, who has the organization has already been in discussions with the Humbold Emerald City Organizing Group.
According to Williamson, who will be at Sunday’s event to answer questions on a panel, the initial study will only be the first of several the group will need to complete, and all fees associated with processing the application will need to be paid up front.
There will also be marijuana experts and speakers at the event on Sunday, including Julia Carrera, a medical marijuana inspector from Mendocino County.
If the group completes the required studies, which include an environmental analysis and a plan outlining how services would be provided, it will need to gather petition signatures from 25 percent of registered voters who are property owners within the defined area.
The group would also need to negotiate a tax revenue sharing agreement with Humboldt County, which indicates what services the new city would take on and how much of the county’s tax revenue it would take in order to have those services.
“It all has to be revenue neutral,” Williamson said. “They can’t ask for more than they need to provide, and they can’t leave the county with less.”
Lamport, who was one of the organizers of an attempt to make Southern Humboldt its own county 15 years ago, said the efforts are part of a longstanding sentiment over local control of services.
“We’ve had several meetings with LAFCO personnel and county officials,” Lamport said. “And, we’ve been pleased with their efforts to take us seriously, and they’ve certainly been encouraging.”

Could Medical Marijuana Get the Al Capone Treatment?

(Forbes.com 3/30/11) Could the IRS use the tax code to shut down medical marijuana dispensaries?

In 1931, mobster Al Capone was finally put behind bars because he was convicted of multiple tax-evasion charges, and the IRS is taking a similar approach with medical marijuana today. Many dispensaries in California now face audits that could result in their owing millions of dollars in back taxes.

According to Forbes columnist Robert W. Wood, the agency is relying on Internal Revenue Code Section 280E, which “precludes deductions for any business trafficking in controlled substances.” While dispensaries are legal in some states, including California, marijuana trafficking remains illegal on a federal level. The IRS is arguing that normal business expenses that most companies can deduct on their taxes are not applicable to dispensaries.

The Marin Alliance for Medical Marijuana in Fairfax, Calif., was the first dispensary to be hit with this ruling earlier this month. Founder Lynette Shaw told the Marin Independent Journal of California that the IRS audited the company’s returns for 2008 and 2009 and disallowed all of the alliance’s business deductions such as buying marijuana, hiring employees, and renting office space. Shaw did not disclose the amount the IRS told her she owes, but she described it as “a staggering sum” totaling several million dollars.

“Every dispensary in the nation, past, present and future is dead if this is upheld,” Shaw said. An IRS spokesperson declined to discuss the case. Shaw is currently planning an appeal.

According to a report from The American Independent, at least 12 dispensaries in California are currently being audited by the IRS.

As columnist Wood points out, the law isn’t completely clear. A previous tax court ruling allowed dispensaries to deduct expenses for activities not directly related to dispensing marijuana, such as caregiving, counseling, education and advocacy.

Allen St. Pierre, executive director of the National Organization for the Reform of Marijuana Laws (NORML), told The American Independent that the immaturity of the medical marijuana industry could have opened the door for these audits, since dispensaries are trying to take normal business deductions while also asking for special treatment for their product’s medicinal value.

“Not many people show up in the newspapers screaming that they make millions of dollars and don’t want to pay taxes,” said St. Pierre.

(http://blogs.forbes.com/eco-nomics/2011/03/28/could-medical-marijuana-get-the-al-capone-treatment/)

Follow

Get every new post delivered to your Inbox.

Join 112 other followers

%d bloggers like this: