Handbook of Tobacco Taxation:
Theory and Practice

Dr. Arthur Laffer’s international tobacco tax handbook discusses excise tax theories while offering practical case studies and examples from around the world on optimizing government tax revenue.

Tobacco taxes are becoming increasingly important due to the financial crisis and as part of the global public health debate.  Laffer’s Handbook of Tobacco Taxation – Theory and Practice outlines that “One size does not fit all”, highlighting the importance of countries retaining their fiscal sovereignty.

Recognized by Time magazine in 1999 as one of “The Great Minds of the Century,” Laffer is best known for the Laffer Curve, an illustration of the theory that there exists a tax rate between 0% and 100% that will result in maximum tax revenue for governments. As many countries are experiencing, the Laffer Curve also applies to tobacco taxes.

“Increasing tax levels can be counterproductive,” Laffer said. “Once tax levels are in the prohibitive range of the Laffer Curve, tax revenues will fall, and if consumers shift to lower taxed or black market tobacco products, it may not even lead to less smoking.”

About Arthur B. Laffer, Ph.D.

Arthur B. Laffer is the founder and chairman of Laffer Associates, an institutional economic research and consulting firm, as well as the Laffer Center at PRI, a non-profit dedicated to preserving and promoting the core tenets of supply-side economics. Dr. Laffer’s economic acumen and influence in triggering a world-wide tax-cutting movement in the 1980s have earned him the distinction in many publications as “The Father of Supply-Side Economics.” His name is attached to the Laffer Curve, a graphical representation that there exists a tax rate between 0% and 100% that will maximize government revenue and above which tax receipts will decline.

Dr. Laffer was a member of President Ronald Reagan’s Economic Policy Advisory Board for both of his two terms (1981-1989). He also advised Prime Minister Margaret Thatcher on fiscal policy in the U.K. during the 1980s. During the years 1972 to 1977, Dr. Laffer was a consultant to Secretary of the Treasury William Simon, Secretary of Defense Don Rumsfeld, and Secretary of the Treasury George Shultz. He was the first to hold the title of Chief Economist at the Office of Management and Budget (OMB) under Mr. Shultz from October 1970 to July 1972.

He was formerly the Distinguished University Professor at Pepperdine University and a member of the Pepperdine Board of Directors. He also held the status as the Charles B. Thornton Professor of Business Economics at the University of Southern California from 1976 to 1984. He was an Associate Professor of Business Economics at the University of Chicago from 1970 to 1976 and a member of the Chicago faculty from 1967 through 1976.

Dr. Laffer received a B.A. in economics from Yale University in 1963. He received a MBA and a Ph.D. in economics from Stanford University in 1965 and 1972 respectively.

About the Laffer Research Team

Laffer Associates is the culmination of a lifetime’s worth of rigorous institutional and academic economic research by Dr. Laffer. The firm’s philosophy is rooted in the belief that political events are the epicenters of global as well as local change, reverberating through every layer of the economy. Drawing upon the application of decades of economic research and analysis, the firm delivers proprietary analysis, dynamic economic models, and a unique supply-side perspective of the macroeconomic workings of the world for use by its clients in analyzing markets, policy, and strategy.


The Laffer Center at the Pacific Research Institute houses Dr. Laffer’s life’s work and seeks to be the leading source for supply-side research and thought, including the research and published works of other economists and thought leaders whose ideas have played an instrumental role in the supply-side movement in the United States and abroad. The Laffer Center is focused on educating people on economic ideas and ensuring that the lessons of supply-side economics are as relevant and applicable today as they were in the 1980s when the supply-side revolution swept the country.