Should a government want to tax illicit economic activity more than the legitimate equivalent (because taxes are dis/incentive tools) or zero (because they do not wish to benefit from illicit activity or even have the conflict of interest it represents)?

N.B. In the UK proceeds of crime are taxable under the same rules as legal income. 

 Sounds like they took the third option of the two and it kinda makes sense. 

 I wonder how that decision was discussed and settled on. 

 Feels like a non decision to me.