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
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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
In addition, Joey Connor not only analyzed the reasoning for the tax increase, but he also discussed how California will have a different position on tax rates compared to other states in April, when the changes become effective. The author also provided specific numbers to show the readers the significance of the tax rate increase; he analyzed the percentage increase per cigarette and per pack, which is a strength of the this article. Connor also explained the other aspects of prop. 64, so he did not limit himself to discussing only tobacco taxes issues. However, when he addresses the issue of the impact of the tax increase, he does not take into consideration that cigarettes might be a inelastic product , and consumer might not be responsive to price changes when they become effective. In conclusion, the author did an outstanding job at analyzing the important aspects of prop. 64 and explaining his readers the implications
Federal Restrictions and Guidelines in Smoking and Politics by A. Lee Frischlet and James M. Hoelfer
If 90% of United States smokers could have another chance to redo it, they reported that they would not even have their first puff that initiated their tobacco addiction (Winickoff, Gottlieb, and Mello 2014). The Tobacco 21 bill is a fairly new legislation and already it has shown a decline in underage smokers as a result of its implementation. The results of the survey presented that the public opinion was largely accepting and supportive of the bill. The main argument against the bill is the harm that will come to retailers of tobacco products. Correspondingly, the argument is proven inaccurate and in favor of the bill. The past has shown the improved outcome of the country from the raise in the minimum alcohol age, and researchers regard
Tobacco is a very large industry in Canada, providing very large tax revenue for the Canadian government. This paper examines the two sides to the argument; should Tobacco be made illegal in Canada? Is smoking tobacco ruining the Canadian economy? Or should Canadians be given the freedom to chose, and current rulings upheld?
History has proven that government penalties, in the form of taxes, deter smoking. The 2000 U.S. Surgeon General’s Report, Reducing Tobacco Use, found that raising tobacco-product prices decreases the prevalence of tobacco use, and tobacco tax increases produce significant long-term improvements in health. From its review of existing research, the report concluded that raising tobacco taxes is one of the most effective tobacco prevention and control strategies (7). Along with price increases, mass-media campaigns and smoking bans have made cigarette smoking pretty much unacceptable in today’s society. “Today, approximately 22 percent of adults age twenty-two and older are smokers, compared with 33 percent in 1979” (Thorpe 1440). It is clear, from these examples, the use of penalties to deter the unhealthy behavior of smoking is a successful intervention.
Consumption of Tobacco is a worldwide phenomenon. Nearly every country is planning to raise more restrictions around the consumption of Tobacco. The awareness about its ill effects is rising through the corridors of Parliaments of many countries with the help of governmental and non-governmental organizations. There are some internationally recognized organizations like the “World Lung Foundations” that are striving hard to reduce the consumption of tobacco to a bare minimum. There are numerous reasons that support the argument that tobacco should be completely banned from the United Sates.
Objections to this new policy might be met with the fact that use of tobacco
Public health strategies this was based on strong evidence showing that tobacco control is cost- effective compared to other health interventions. It involved measures on price and taxes, exposure to tobacco smoke, the contents of tobacco products, product disclosures, packaging and labeling, education, communication, training, and public awareness, tobacco advertising, promotion and sponsorship and reducing tobacco dependence.
Tobacco is one of the world's dangerous drug which is haunting human lives to death. Over a billion adults are addicted to this drug and wasting their money, time and health. Nowadays there has been an ongoing debate/discussion among many people about the role of government in restricting the usage of Tobacco and thereby safeguarding the health of the public. In my personal opinion, both government and the Individual together needs to work to overcome this problem.
After reading this chapter it helped me open my eyes to the problems that tobacco can cause. These problems include cancer and other diseases that can limit a persons life. For this reason I personally believe that there should be a sin tax on tobacco not only to discourage people from continuing but also to limit those who are thinking about starting.
The use of tobacco is a very controversial topic here in the United States. The harmful side effects of tobacco are well known and consequently, many believe that it should be outlawed. Though this has not yet occurred, constant regulations on the industry and
Health economics can be used also prospectively together with the programmer or individually to inspect the influence of health promotion and health promotion procedures. For example, independent examination of the influence of a strategy can be used to measure the effect of tax changes on smoking behavior between unalike social groups. review the likely influence of an increase in the excise tax amount on cigarettes on the number of adolescent smokers, telling that a 23% rise in the price of cigarettes would result in a discount of 16% in the number of adolescents who would then smoke, and a decrease in the number of cigarettes smoked by adolescents of 14% ( December 1,
There are many cities who have implemented bans on cigarettes, but China overall is still the leading consumer of cigarettes in the world. A countrywide tax on cigarettes has been proposed to their Ministry of Finance, and Ministry of Economics and Trade, but a decision has yet to be made. Tobacco production provides substantial revenue to the government and a tax increase will have a significant effect on the central government and reduction of consumption of cigarettes. According to a study done by the group proposing the tax, “a 25% tax increase will have an overall monetary benefit that far exceeds the negative impact on the cigarette industry and tobacco farmers. In financial terms alone, not counting the number of lives saved and medical care cost savings, the gain of the central government tax revenue (24.58 billion Yuan) twice exceeds the loss of tobacco farmers’ earnings, tobacco industry workers’ earning and loss of industry and local government revenue (11.74 billion Yuan)” (Hu TW 107). There many components to this calculation, but some factors included the reduction of cigarette consumption, the number of lives saved, savings in medical care costs, gains in productivity due to avoidance of premature death, industry revenue lost, lost jobs in cigarette industry, loss of tobacco income, and loss of local government
The genre of this writing piece is a political news article published for The Daily Telegraph. It details the highly politicised and controversial topic of the Federal Government’s budget and potential tobacco excise increase. As it is a news article, it informs the audience
Smoking in the US is responsible for annual healthcare costs to the tune of $170 billion, with an extra $130 billion in lost productivity (CDC, Economics). Thus, by increasing taxation, the US government can both compensate for these financial damages, as well as potentially alleviate the burden itself by reducing the number of smokers contributing to annual loss (NPR). Alternatively, one could interpret increasing taxes on tobacco products as targeted strikes against populations with disproportionate tobacco use. For example, those living below the poverty line, or those with limited formal education smoke at rates almost double the general population (CDC, Fast Facts). This tax is reducing dangerous and costly behavior, to the benefit of the entire population - but it is simultaneously imposing additional financial burdens on already oppressed groups. While this is a far cry from the Nazi’s use of biopower to justify racial cleansing (Foucault 248), it can be a subtle reminder of how biopower can justify potentially problematic measures through otherwise well-intentioned