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Many Skeptical Of Revenue Estimates From Proposed Tobacco Tax

Tobacco industry doubts revenue estimates of cigarette tax hike
By BARBARA HOBEROCK World Capitol Bureau

OKLAHOMA CITY — Critics of a proposal to raise the tax on cigarettes by $1.50 a pack to shore up the state’s Medicaid system say the plan would not generate the revenue projected.

David Sutton, a spokesman for Phillip Morris USA, said the measure, if passed, would result in some Oklahomans driving to surrounding states with lower taxes to make cigarette purchases. Oklahoma would have the highest tax rate among states in the region if the $1.50 is added, he said.

When residents purchase cigarettes out of state, they take gasoline, grocery and other dollars with them, which reduces revenue to the state in the form of lost sales taxes, Sutton said.

“We don’t have any data or evidence to show people will drive across state lines with an increase in the cigarette tax,” said Carter Kimble, Oklahoma State Department of Health director of state and federal policy.

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