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.”