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Analysis of an Excise Duty: the Policy of Tobacco Taxes in Germany

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Daniel Ströbel - Analysis of an excise duty: The policy of tobacco taxes in Germany

Analysis of an excise duty
The policy of tobacco taxes in Germany

Master of Business Administration (MBA)

Module: Assignment: Course Instructor:

Economics 1/2 Dr.rer.pol. Markus Wilhelm

Author:

Daniel Ströbel

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Daniel Ströbel - Analysis of an excise duty: The policy of tobacco taxes in Germany

Executive Summary
Aim of this work is to analyse tobacco tax in Germany and find out under which circumstances it can be used as instrument to increase revenues from this excise tax for the state or to discourage smoking. The German market was analysed to find out that roughly 26% of the population are smokers, generating revenue of 13.37 …show more content…

XIV Personal View ..................................................................................... XIV

Bibliography ................................................................................................. XV Appendix - Elasticity Calculation............................................................... XVIII

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Daniel Ströbel - Analysis of an excise duty: The policy of tobacco taxes in Germany

List of tables
Table 1: Price Elasticity ...............................................................................VIII

List of figures
Figure 1: Development of tobacco tax base, sales of duty-paid cigarettes and average tax per cigarette 2000 – 2009 (derived from Federal Ministry of Finance 2010)................................................................................................ V Figure 2: Supply, Demand and Equilibrium Price ..........................................VI Figure 3: Effect of tax on supply and demand (derived from Mankiw 2008, 168) ...............................................................................................................XI Figure 4: Laffer curve (derived from Mankiw 2008, 168) .............................XIII

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Daniel Ströbel - Analysis of an excise duty: The policy of tobacco taxes in Germany

1 Introduction
When it comes to smoking, the state has a much divided view in this topic. On the one hand, state representatives should care for the wellbeing of the

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