Instead of putting spending in line with available revenue, Gov. Fallin is calling for a cigarette tax increase of $1.50 per pack, a 146 percent rate increase that would make cigarettes sold in Oklahoma among the most heavily-taxed in the nation. Cigarette taxes are regressive, hitting low-income consumers the hardest, and are a volatile source of revenue. Increasing the state’s reliance on tobacco taxes will only make budgeting more difficult. In fact, according to industry data, only three of the 32 state tobacco tax increases that went into effect between 2009 and 2013 met or exceeded revenue projections. It is for this reason that tobacco tax hikes often serve as placeholders for future tax increases on the broader populace.
Another proposal to raise taxes being debated in Oklahoma is an expansion of the sales tax base to include more products and services. Generally, this can be the basis for good tax reform at the state level when paired with broad base rate cuts. However, that is not what is being proposed here. Oklahoma already imposes the sixth highest average state and local sales tax in the nation at 8.77 percent.
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Opinion of the Editor
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David Van Risseghem is the Director of Sooner Politics.org. The resource is committed to informing & mobilizing conservative Oklahomans for civic reform. This endeavor seeks to utilize the efforts of all cooperative facets of the Conservative movement...