NO MORE LUXURY TAX

September 16, 2008
Michael Sheehan

Physician's Money Digest, February28 2003, Volume 10, Issue 4

Wall

Street Journal

Luxury car sales may get anothershot in the arm this year with thedemise of the luxury tax on expensivecars. Back in 1991, when thetax was first imposed, luxury carbuyers paid a surtax of 10% on anycar that cost more than $30,000.This "envy tax" originally applied toother big-ticket items like boats,jewelry, and fur coats, but wasrepealed on most of them in 1993.Cars, however, stayed on the list,although the percentage went downeach year, finally hitting zero onJanuary 1 of this year. A recent editorial noted thatthe tax, which helped to cause a77% drop in boat sales in its firstyear, never generated the revenue itsbackers claimed it would.