Corrective Taxes and Cigarette Characteristics

Calcott, Paul; Petkov, V.

doi:10.1002/hec.3188

Cited by 2 publications

(1 citation statement)

References 20 publications

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“…The European Union typically levies a mix of ad valorem and volumetric taxes (Delipalla & Keen, 2006). Calcott and Petkov (2016) describe the optimal mix of these two instruments.…”

Section: Extensionsmentioning

confidence: 99%

Choosing between imperfect proxies for a corrective tax

Calcott

Petkov

2022

J Public Economic Theory

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Choices are sometimes distorted by internalities or externalities. This paper considers a setting in which the distortion cannot be taxed directly, and asks how a policymaker should choose a proxy variable to tax instead. We derive a criterion for when one proxy should be preferred to another, and consider a range of factors with implications for this criterion. These factors are (i) sensitivity to the tax rate, (ii) how accurately the taxed variable approximates the distorted variable, (iii) susceptibility to offsetting behavior, and (iv) consumer heterogeneity. Our analysis is illustrated with a comparison between ad valorem and volumetric taxes on sugar‐sweetened beverages.

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“…The European Union typically levies a mix of ad valorem and volumetric taxes (Delipalla & Keen, 2006). Calcott and Petkov (2016) describe the optimal mix of these two instruments.…”

Section: Extensionsmentioning

confidence: 99%

Choosing between imperfect proxies for a corrective tax

Calcott

Petkov

2022

J Public Economic Theory

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Basic economic gap related to smoking: reconciling tobacco tax receipts and economic costs of smoking-attributable diseases

David

2018

Tob Control

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BackgroundTobacco tax rates set by various governments are not based on the idea that tax receipts should cover the costs incurred by smoking. It can be assumed that tobacco tax receipts (TTR) differ from the costs of smoking. The aim is to determine the global basic economic gap (BEG) between TTR and the economic costs of smoking-attributable diseases (ECS).MethodsBEG is described as the difference between the ECS and TTR. A total of 124 countries representing 94% of global tobacco consumption were included in the research by means of the creation of a database, the adjustment of input data and the identification of their intersection.ResultsThe global BEG reaches US$1438 billion per year. The global ECS are US$1911 billion per year. The global TTR are US$473 billion per year and compensate for only one quarter of the ECS. Within countries with the highest consumption of cigarettes, especially the USA but also Russia and Germany, the proportion of the ECS covered by the TTR is even lower, although private health expenditures have been taken into account.ConclusionsOur findings suggest that tobacco taxes would have to be globally increased by more than four times on average in order to cover the ECS or between two and two-and-a-half times if we take private health expenditures into account. The informational pressure concerning health risks associated with smoking aimed at reducing harmful consumption and improving global health can also be supported with these economic facts.

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Corrective Taxes and Cigarette Characteristics

Cited by 2 publications

References 20 publications

Choosing between imperfect proxies for a corrective tax

Choosing between imperfect proxies for a corrective tax

Basic economic gap related to smoking: reconciling tobacco tax receipts and economic costs of smoking-attributable diseases

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