World Trade: Tobacco's Taxing Dilemma

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Sweden's state-run tobacco company uses taxation to help discourage the spread of smoking. Taxes already account for 53¢ of the 65¢ that Swedes pay for 20 cigarettes, and Sweden will boost the levy another 8¢ in July. At 73¢ a pack (83% of that in taxes), Sweden will still rank below Denmark, where a 90% tax makes a pack of 20 cost 88¢, the world's highest price for cigarettes. Swedish officials predict from experience that the boost will bring only a brief and shallow slump in sales.