Report: Excise, 'Sin' Taxes in Okla. Burden Poor More Than Wealthy
Price, Marie, THE JOURNAL RECORD
Income taxes tend to take a bigger bite from wealthier taxpayers, but excise and "sin" taxes pull more out of the pockets of the poor, according to a new report from the National Center for Policy Analysis, a Dallas-based conservative think tank.
Michael Davis, a business professor at Southern Methodist University and a NCPA senior fellow, reviewed government data and research on taxes on tobacco and alcohol, excise taxes on necessities such as gasoline and utilities, as well as lotteries.
Davis said that policymakers considering raising taxes on any of these activities or products "should consider the disproportionate burden their lower-income constituents will bear."
The NCPA study was released as Congress considers increasing federal tobacco and possibly other taxes to help fund the expansion of health care coverage for children.
Davis contends that a state-run lottery is a regressive way to raise funds, stating that those who earn less than $10,000 per year spend twice as much on a dollar-amount basis as those earning more than $100,000.
Oklahoma Lottery Commission officials said Thursday that the state lottery, a portion of revenues from which goes toward education, has meant an additional $125.4 million for K-12 and higher education, the Oklahoma Teachers Retirement System and a school consolidation and assistance fund since its inception in late 2005.
Citing data from the Centers for Disease Control and Prevention, Davis said that one-third of lower-income adults smoke, versus one- fifth of middle- and high-income earners. High school graduates who smoke spend about $1,450 on cigarettes and other products each year, compared with $1,248 for smokers with professional-level college degrees, he found. Those who drop out of high school spend three to four times as much of their income on tobacco percentage-wise as do professionals, Davis writes. …