[xyzzyz]

Yes, they are breaking laws by selling drugs. No, they still pay taxes. The reason is that the federal drug enforcement agency that could go after them for breaking the low most likely will not do that, whereas IRS highly likely will go after them for not paying the taxes.

[anticensor]

Most countries prevent that dilemma by making the taxation rate of criminally acquired income 100%.

[xyzzyz]

The point is not to actually enforce these laws. If that sounds schizophrenic to you, that's because it is.