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Luxury Tax

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Roger Chartier: -

Most of us never pay a luxury tax but, it is a tax on items that we honestly don't need to get along day to day.

Luxury taxes were brought in to increase the money that governments had to fight a war.
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Sports payrolls incur a lurury tax for the team players to the extent to which it exceeds a predetermined guideline level set by their sports league.

Recently the New York Yankees paid a luxury tax of $28 million dollars which brought the amount that they have paid since 2003 past $250 million dollars!

The Los Angeles Dodgers only had a luxury tax for payroll of $11.4 million.

The threshold for baseball teams will go up to $189 million in 2015.

Wealthy people are more likely to pay a luxury tax as they are likely to buy something like an expensive fur coat, jewelry, huge yacht, etc.

Yet, some are becoming wealthy after winning a bunch of $$$ on a television show, with the lottery or hitting it big in Vegas.

Originally Congress imposed a 10 percent luxury tax on yachts, private airplanes and expensive automobiles as well as many other items

Some items that were once considered luxuries are no longer so luxurious.
However a million dollar car is.
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Cars have had some changes. The luxury tax on them started in 1990 and ended in 2002.

Fuel efficiency cars got some sort of a break. Motor homes are not luxury vehicles.

On December 31, 2002, the luxury car tax rate had dropped to 4% on a cost of more than $40,000.

That was based on the Manufacturer's Suggested Retail Price for a new automobile. Then that year tax stopped because Congress would not renew it due to its unpopularity.

For 2011 - 2012 the limit was $57,466.00 including Goods and Services Tax.

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