by Arthur Laffer
Pacific Research Institute
August 06, 2014
Despite mounting pressure for international tobacco taxation, or international guidelines to harmonize tobacco taxation across countries, there is scant theoretical rationale for either. As theory and practical experience make clear, countries need to retain control of their own fiscal policy – one size does not fit all. There are vast differences in policy objectives and priorities, social and economic circumstances, and existing industry and excise tax structures across the globe. Because there are upper limits to the size of tax increases and how high the tax levels on tobacco products can be at the national level, countries need to retain their fiscal sovereignty to determine the optimal excise tax structure and level on tobacco products to meet their national government objectives.

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