[MattRogish]

That's an interesting point that I've never considered (or heard mentioned in the legalize argument). I'm for legalization + taxation of all drugs but will we still see significant folks producing and selling illegally as a tax dodge? May legalization merely get drugs into more hands but still maintain significant illegal production? If so, a lot of the supposed benefits of legalization dry up.

[doktrin]

The market for moonshine is niche at best :

"The number of jurisdictions which ban the sale of alcoholic beverages is steadily decreasing which means that many of the former consumers of moonshine are much nearer to a legal alcohol sales outlet than was formerly the case. Moonshine-like distilled beverages with names like Collier and McKeel White Dog,[27] Everclear, Virginia Lightning, Georgia Moon Corn Whiskey, Ole Smoky Tennessee Moonshine,[28] Platte Valley Corn Whiskey Cat Daddy and Junior Johnson's Midnight Moon are produced commercially and sold in liquor stores, typically packaged in a clay jug or glass Mason jar. As a result of these changes and aggressive law enforcement, moonshine production is far less widespread than it was formerly." [1]

[1]http://en.wikipedia.org/wiki/Moonshine_by_country

[dbuxton]

Yes, here in the UK cigarettes are legal but smuggled cigarettes are a massive (£multi-billion) business because taxes are so high.

Obviously there is a point at which taxation is virtually equivalent to prohibition (1,000,000%?) so the aim of a good tax in this arena is to (1) discourage consumption (2) provide some revenue to offset against social costs of the activity (healthcare costs of smokers, for example) while (3) not being so outrageous as to push the activity underground altogether.

[Androsynth]

The ratio of moonshine to legit alcohol sold is tiny though.

[base698]

It depends on what the markup is. You can't have taxes that equal current costs. If that was the case the market would largely stay the same.