QotD: Luxury Tax
Posted December 27th, 2003 @ 04:09pm by Erik J. Barzeski
Question: If you could impose a heavy luxury tax on any item, what would it be and why?
My Answer: Caviar. After all, only wealthy people seem to eat the stuff and who better to tax than those who can afford to give a little more? It's not like I'd want to see a luxury tax on toothpaste or something.
You are encouraged to answer the Question of the Day for yourself in the comments or on your blog.
Posted 27 Dec 2003 at 4:57pm #
Nothing :). **Tries to fight hands from typing why we should have a flat tax**
Posted 27 Dec 2003 at 9:23pm #
any vehicle that doesn't get more than, say, 35 MPG (in the city)
Posted 27 Dec 2003 at 9:27pm #
Jennifer, that's probably 98% of vehicles and with that percentage, it's not a luxury tax anymore at all. My car does 35 on the highway, and I'm fortunate.
Posted 27 Dec 2003 at 11:24pm #
Erik, your car wasn't designed for a good mpg-rating. Most European cars are, and 235 mpg isn't that uncommon for new cars (probably not in the city though).
The reason for this is that in Europe, gas is much more expensive (around EUR1 per liter, or $4.70 per gallon), so I'd just go for taxing gas.
Disclaimer: I don't own a car, and don't plan to do so any time soon.
Posted 28 Dec 2003 at 12:30am #
I really doubt that you get 235 MPG, and 35 in the US is pretty good.
Posted 28 Dec 2003 at 1:06am #
While 235 MPG sounds absurd, I do know that gas in Europe is insanely expensive (they sell it by liter instead of by gallon, purely due to cost) and many people drive mini-cars or scooters due to this. Perhaps the 235MPG was based on a scooter?
Also, you can easily get mileage in the 60s with a Hybrid car.
Posted 28 Dec 2003 at 3:52am #
Etan: no, they don't "sell it by liter instead of by gallon, purely due to cost," they sell it by the litre because they use the metric system, just like The Whole Of The Rest Of The World. The USA is the only country to cling to the archaic "Imperial" system. Lovely, isn't it? A country that prides itself on having broken free of the Imperial Royalty is now trapped using ancient Imperial Measures like the inch and the pound, measurements based on some arbitrary Royal's body parts. Quick: how many ounces in a gallon? And is that an American gallon or an English gallon? No matter what, there's always 1000 ml in a litre. That's why Engineering departments (even in the USA) teach the metric system.
Jon Gales: the flat tax argument is an old one that won't be answered here, but most analysts agree that a flat tax would unfairly punish the poor and be to the advantage of the rich. I think just actually sucessfully taxing the rich would be a good start, wouldn't you? These days, the more you make, the better tax accountants you can afford, and the less tax you pay.
Eric: a google on "235 mpg" revealed this so there's no reason to think that 35 mpg is a natural average. FWIW my 27 year old highway-capable motorcycle does 45 mpg. Why can't a car designed nearly 30 years later do better? Because users aren't punished for using inefficient cars. A luxury tax on guzzlers makes a lot of sense. Why did you choose a vehicle with such poor gas consumption? Was it because it could do more than double the legal speed limit? Because you could haul a semi-detached bungalow behind you? Because you could chew your way through the muddy countryside? I don't know what you drive, but if you're a city dweller, why do you need more than an econobox? And note: these days econo refers as much to gas consumption as to wallet-lightening. What's wrong with a Prius? (Apologies: if you own an acreage or a hobby farm and really do have to haul farm equipment around, then a truck/SUV/4x4 makes sense.)
Posted 28 Dec 2003 at 9:02am #
Fred, you're an idiot if you think that 35 MPG is "bad." I didn't buy a gas guzzler - on average, my car is better than about 75% of vehicles on the road in the U.S. My scooter gets nearly 100 miles to the gallon. Motorcycles weigh less, so they get better mileage. Duh. My vehicle doesn't get "poor" gas consumption when compares to all of the other cars on the road. Back off and learn some facts.
Posted 28 Dec 2003 at 11:16am #
Motorcycles do better milage because they are LIGHTER. The more weight mean the more that engine has to pull, thus, cars would use up more gas. Don't some people around here remember simple science?
I'd get a hybrid if they weren't so expensive, but since I'm not swimming in money I'll just have to do my part in destroying the environment.
A Prius does 55mpg and costs $20K for a car the size of a tuna can. How the hell much do you think a 256mpg car is going to go for?!
Posted 28 Dec 2003 at 2:06pm #
You can't put tax on Caviar because then wouldn't we just become the people who can afford it? It's a paradox world out there.
Posted 28 Dec 2003 at 2:19pm #
Fred: while I agree with the superiority of the metric system, I disagree with your blanket statement that engineering departments in the USA teach metric, implying that they *only* teach metric. We are taught both.
On the issue of taxes (that was the original question, was it not?), I think that we should drop the income tax in favor of a sales tax all the way around. There will always be loopholes on income taxes, but if there's a national five percent sales tax, it's a bit harder to avoid. Besides, last I checked, rich people tend to buy more than poor people.
Posted 28 Dec 2003 at 10:07pm #
Erik, maybe it's time we started thinking that any vehicle that doesn't get at least 35 MPH is a luxury... it's certainly something that we humans can't afford to keep doing for much longer.
If we had to pay more for these types of cars/trucks, then the demand for more fuel efficient vehicles would go up and the "luxury" cars would stop selling so much. Manufacturers would quickly adopt cleaner, more efficient technology to take advantage of that demand and we'll all be better off. (Though I would vote (with my pocket book) for some form of fuel that isn't fossil based.)
Posted 29 Dec 2003 at 6:58am #
i'd say a tax on any new cars that dont get at least 28mpg city. 28 just sounds decent. maybe 25, maybe 32... whatever. And regardless of gas mileage, any SUV with a passenger volume capacity over... i dont know... 120 cubic feet. ...because gigantic SUVs are retarded, and i've yet to know of anyone who could justify owning one.
fyi: i'm talking about in america. good fuel efficiency is 35mpg. in fact, 35mpg is the standard average sold that car companies have to adhere to, i believe.
Posted 29 Dec 2003 at 9:26am #
Luxury Tax? I thought we already paid this to Apple.
Posted 29 Dec 2003 at 2:17pm #
Erik said: >
Well, it could make some sense... See there: http://www.toothpasteworld.com/
😉
(About a tax on "indecent gas consumption", I agree with Jennifer.) (And let's not forget gas-propelled RC helicopters.) 😉
(Motorcycles are lighter, but they are generally not as aerodynamically efficient - in terms of Cx - as the average european-style car. So a comparison might not be totally absurd.)
Posted 29 Dec 2003 at 2:20pm #
Gary said: "Luxury Tax? I thought we already paid this to Apple."
That one was good! Unfair but good 😀
Posted 29 Dec 2003 at 2:23pm #
The first lines should have looked like this:
Erik said: "It's not like I'd want to see a luxury tax on toothpaste or something."
Well, it could make some sense... See there: http://www.toothpasteworld.com/
Posted 30 Dec 2003 at 5:51pm #
Legalized marijuana.
This would give users safer pot, it would benefit shareholders and the government at once, and it would lower crime rates because marijuana distribution would be legitamate. I love the idea.
Lawyers who bring a tort case to trial and receive 25% or fewer of the juror's votes. (The tax should be at least five grand.)
This would definately make lawyers more discerning about the torts they bring to trial and would thereby lower the caseload of courts and make civil justice faster.
Designer coffees. The tax should be ear-marked specifically for military spending.
This would just piss off the starbucks yuppie crowd. There's not really anything more to it than that probably.
Progressive taxation for feul economy based on the model year of the car -- paid at the pump. So, if you've got a classic car that gets just 10MPG you would be hit hard, but not as hard as a 2004 Silverado getting that same 10MPG. Also, if you have a particularly "green" vehicle you'd you'd continue to get the write off on your income taxes, but you'd also get gas a few cents cheaper at the pump.
I think we all know why this makes sense.
Posted 31 Dec 2003 at 5:11pm #
Jon: I'll support your flat tax, as long as the first $20k or so of income is tax-free.
Posted 20 Apr 2004 at 11:59am #
I think a luxury tax on SUVs is a great idea. But only on SUVs, not trucks. How many soccer moms are buying Ford F-250s to shuttle their kids around? Don't punish the truck buyers who have a legitimate reason wo own an SUV.