145-percent tax hike a bad idea

By OCPA President Jonathan Small

Tax increases are often a twoedged sword, and that is especially true of the proposed 145-percent cigarette tax increase ($1.50 per pack) currently being pushed by some tax-consumers. In this case, especially, it is a glaring warning to be careful what you wish for.

The justifications are obvious: smoking is bad for you, and the state budget needs money. A perfect solution, we are told. Except for its dramatic imperfections.

This tax increase is not just imperfect policy; it would also be a huge windfall for Oklahoma’s Indian tribes, which under a state compact get half of state cigarette taxes from cigarettes sold on their land. Those Indian smoke shops that already get a lot of business would boom, and it is estimated that as much as $120 million annually would be paid by the state to the tribes to sell cigarettes.

 

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