Sunday 18 September 2011

luxury Impact

When a luxury tax is imposed, the majority of people aren't affected by it and aren't subject to the tax.[citation needed] Over time, what is viewed as "luxury" might change, resulting in more and more people being affected by the tax. Despite the animosity that ensues, the government may view the income from the luxury tax as essential and will not restrict or rescind it. So it may happen over time that goods considered "ordinary" might also incur luxury tax. An example of this can be seen with various commodities in the country of Norway, where at the beginning of last century, cars and chocolate were viewed as luxury goods. Thus, additional taxes were levied upon these goods. Today few Norwegians consider cars or chocolate a luxury, but the luxury taxes on these goods remain. In Ireland, many personal hygiene products are within the luxury tax bracket. In the United States, winning on a game show is usually considered a luxury, which is subject to taxation as well.

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