The World Health Organization (WHO) is meeting next week in Moscow to discuss how to reduce demand for tobacco on a global scale, and one of the proposals many expect WHO to encourage is a higher tax on all tobacco products. According to WHO reports released earlier this year, officials are considering a tax that would account for nearly 70 percent of a tobacco product's total price.
A tax that steep would have significant impacts on local and national economies, many of which are explored in a new book from renowned economist Arthur Laffer featured in the most recent edition of The Taxpayer's Tab.
In "Handbook of Tobacco Taxation: Theory and Practice," Laffer describes case studies from countries as diverse as Ireland, Singapore, South Africa, and even the United States in which higher tobacco taxes have not only had minimal (if any) effect on smoking incidence, but have even lead to lower government revenues as high prices pushed sales to the black market. Should the WHO recommendations take effect, Laffer predicts that global cigarette price averages could increase by over 107 percent -- from $5.66 per pack to $11.71 -- and by well over 300 percent in countries like India and Peru. Such a tax would not only be ineffective at improving health outcomes, but would effectively enact a regressive tax structure that offers an unreliable source of revenue.
Also featured in the latest edition of The Tab:
- H.R. 5601, the Foreclosure Restitution Act, would dedicate $5 billion of the total settlement reached between the Department of Justice and Bank of America to the Neighborhood Stabilization Program. It was introduced by Congressman Alan Grayson (D-FL).
- Congressman Joe Crowley (D-NY) introduced the Peaceful Learning Act to fund soundproof construction in schools near loud railroad tracks. It would increase federal spending by an unspecified amount.
You can check out The Tab online to find out more.