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What is the luxury car tax?
The luxury car tax was a federal tax imposed on cars with prices above a certain level between 1990 and 2002. Despite its name, the luxury car tax applied to all cars that were eligible because of price, including expensive sports cars and more traditionally luxurious vehicles designed for comfort and prestige.
Why are luxury taxes bad for the economy?
When charged on essential goods, like food and medicine, they are seen as disproportionately burdensome to lower-income consumers, who are forced to pay a higher percentage of their income in sales taxes. A luxury tax is a sales or transfer tax imposed only on specific goods.
What is a luxury tax Quizlet?
Key Takeaways 1 A luxury tax is a sales or transfer tax imposed only on specific goods. 2 The products taxed are considered non-essential or are affordable only to the wealthiest consumers. 3 The mansion tax and sin taxes both fall into the category of luxury taxes.
Is the luxury tax an indirect tax?
The luxury tax is an indirect tax in that the tax increases the price of the good or service, a price inflationary burden which is only incurred by the end consumer who purchases or uses the product.