Quote:
Originally Posted by GGG
Yeah I think I agree it isn’t really practical but I like the concept of taxing excess.
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And I think that's the crux of it. It
seems like a great idea because hey - people that buy luxury items can afford it. So let's tax luxury spending - who's going to disagree with that?
The problem is that luxury spending is extremely fluid - it just shifts elsewhere. And luxury spending is highly profitable, the last thing you want is to chase it away.
Going back to autos - luxury items subsidize the base models. If you reduce the profitability on big ticket items, you have to charge more for economy models. Everybody loses.