Budget & Tax

Tax hike on families of smokers is poor public policy

February 24, 2017

Gov. Mary Fallin has proposed raising the taxes on cigarettes by $1.50 per pack. She says this will lower the consumption of cigarettes, thus improving health statewide, and will pay for some state health services. After the proposed removal of the state sales tax on groceries because of its regressive nature, the increase to the cigarette tax is hard to explain. Regressive taxes put a higher burden on lower income individuals compared to those with a higher income. More low income Oklahomans buy cigarettes, so removing one regressive tax to then increase another appears counterintuitive.

Many smokers have formed an addiction, so an increase in price is unlikely to deter their purchase of cigarettes and simply puts more pressure on household’s budgets. Alternatively, a simple ban on all tobacco products would be more effective to reduce smoking without further straining the budgets of low-income Oklahomans. The fact that other tobacco products such as cigars and chewing tobacco are not included casts some doubt on the health benefits of the tax as both of those products have similarly adverse health effects that cigarettes do.

The chart shows that revenue from the current cigarette tax has fallen significantly since 2012. This suggests the real priority is revenue for the state rather than simply trying to reduce smoking. Spreading out the tax to other tobacco users would at the very least lessen the burden placed families of cigarette smokers. To take from the most vulnerable to attempt to curb behavior is an infringement on the liberties of those Oklahomans and is poor tax policy.