Luxury tax

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The luxury tax is a type of tax levied by the state on goods and services that are considered luxury .

General

The control can be used as property tax on the ownership of luxury goods to be designed or traffic control on the sale of luxury goods (typically as a luxury sales tax or increased value added tax rate on luxury goods). Since the question of what is to be regarded as “luxury” cannot be answered objectively, the ( demand for) luxury tax is sometimes a political catchphrase .

aims

Proponents of luxury taxes state the following goals:

  • The primary goal of a tax is always to generate tax revenue for the state.
  • A luxury tax is intended to tax the wealthy more heavily, because they are more likely to be luxury goods such as B. purchase jewelry, expensive automobiles or yachts. In many countries z. B. Cars, jewelry or furs are subject to a luxury tax.
  • Trade policy reasons are often the attempt to make foreign (luxury) products more expensive. It is a form of protectionism .
  • An ethical justification is also given: a multitude of laws against luxury have been passed throughout history. Most of the time, the cost of clothes, banquets and funerals should be kept in check, partly for ethical reasons, partly to prevent impoverishment or to make it possible to separate the classes from one another.

The last point is the subject of economic literature. The controversial question of whether luxury taxes can (more desirably) reduce luxury consumption is difficult to answer. Generally leads to the Neoclassical theory taxation to a price increase (by passing on to the end user) and thus to a market equilibrium at lower conversion. While some authors see this connection also for luxury taxes, other authors see no steering effect: The benefit of luxury goods is that luxury goods are so expensive that not everyone can afford them. This means that price increases do not necessarily lead to a reduction in demand : the status of the buyer increases with the purchase because the luxury good has become more expensive, and demand increases with it.

Germany

Frederick I of Prussia was considered a tireless inventor of new taxes , who introduced a wig and body tax in March 1698, which was abolished in November 1717. In January 1762 Prussia introduced the servant tax. Likewise, the dog tax that still exists in Prussia was first initiated as a luxury tax in 1810. Kaiser Wilhelm II introduced the sparkling wine tax as a luxury tax in May 1902, and it lives on today as a sparkling wine tax . In the Weimar Republic from 1919 to 1926 there was a luxury sales tax. It was an increased sales tax rate (the surcharge was initially 15%) for certain luxury goods, which was regulated in §§ 15-24 of the Sales Tax Act of December 24, 1919. The luxury tax was highly controversial. The liberal Reich Finance Minister Peter Reinhold described the luxury tax as the "most dangerous and senseless" tax, since it taxed German quality work. The tax liability on the sale of works of art was seen as detrimental to the art business. On October 1, 1922, the catalog of affected luxury goods was reduced. The tax rate was reduced to 10% on January 1, 1925 and to 7.5% on April 1, 1925. With the law on tax reductions to ease the economic situation of March 31, 1926, in addition to the luxury tax, the salt tax and the wine tax were abolished and the merger tax and the value added tax rate were reduced. The reason was also a purely fiscal one: the cost of collection was significantly higher than the tax revenue.

International

Austria

Luxury tax of the city of Vienna in the interwar period

With the separation of Vienna from Lower Austria , the municipality of Vienna , as the city always called itself until 1934, received financial sovereignty as a separate federal state . City Councilor for Finance Hugo Breitner introduced a state tax system that was mathematically extremely progressive. These taxes included the house building tax , a levy that had to be paid per job by those who employed employees in their private household ("house helpers tax"), a luxury goods levy as a special sales tax (e.g. sparkling wine , caviar , precious stones, antiques) and on amusements such as Balls ("amusement tax"). Business representatives like Ludwig von Mises argued against the luxury goods tax that it would damage exports and the competitiveness of Vienna's economy abroad and among tourists in particular.

Luxury tax 1978–1992

In 1978 a new, third rate of sales tax was set at 30% in Austria . This (colloquial) luxury tax was levied on cars, jewelry, watches, furs and consumer electronics. The “luxury tax” was partially omitted in 1987 and entirely in 1992 and was replaced on cars by the standard consumption tax (NoVA), which is levied in addition to sales tax.

Italy

To deal with the debt crisis , a luxury tax was introduced in Italy in 2012, which affects cars with an engine output of more than 250 hp, ships and boats over 10 m in length and private aircraft.

Netherlands

In addition to sales tax (of 21%), there is a BPM tax (Lade van Personenauto's en Motorrijwielen) when buying a car or motorcycle. This luxury tax is based on the value and CO 2 emissions of a vehicle.

United States

In the United States, the luxury tax was abolished in 1993 just a few years after it was introduced.

Other states

Luxury taxes are levied on certain luxury goods in Denmark and Finland.

See also

literature

  • Nicholas Gregory Mankiw: Fundamentals of Economics. 3rd edition, Schäffer-Poeschel, Stuttgart 2004, ISBN 3-7910-2163-X .
  • Heinz-J. Bontrup, back to the welfare-oriented state with even more indirect taxes? Only luxury taxes would be the right way to go, in: DIW-Vierteljahrshefte zur Wirtschaftsforschung, Inequality Developments and Distribution Scopes, 80th year, issue 4/2011, pp. 189-208, ISBN 978-3-428-13846-3 .

Individual evidence

  1. ^ Meyers Konversations-Lexikon. 1888, keyword "luxury"
  2. ↑ z. B. Norman J. Ireland: On limiting the market for status signals . In: Journal of Public Economics . tape 53 , no. 1 , January 1994, pp. 91-110 , doi : 10.1016 / 0047-2727 (94) 90015-9 .
  3. ↑ z. B. Giacomo Corneo, Olivier Jeanne: Conspicuous consumption, snobbism and conformism . In: Journal of Public Economics . tape 66 , no. 1 , October 1997, p. 55-71 , doi : 10.1016 / S0047-2727 (97) 00016-9 .
  4. ^ Karl Braun-Wiesbaden, From Friedrich the Great to Prince Bismarck , 1882, p. 24
  5. ↑ RGBl. 1919, page 2157
  6. ^ Karl Dietrich Erdmann, Karl-Heinz Harbeck, Günter Abramowski, Karl-Heinz Minuth: Reich Chancellery files: The Marx III and IV cabinets: May 17, 1926 to January 29, 1927, January 29, 1927 to June 29, 1928: ( 2.) June 1927 to June 1928: Documents Nos. 243 to 476. Volume 10; Volume 12, 1988 ISBN 3-7646-1861-2 , p. 189 ( limited preview in Google book search).
  7. ↑ Kristina Kratz-Kessemeier: Art for the Republic: The Art Policy of the Prussian Ministry of Culture 1918 to 1932. 2008, ISBN 3-05-004371-7 , p. 466 ( limited preview in the Google book search).
  8. ^ Georg Jäger, Dieter Langewiesche, Wolfram Siemann: History of the German book trade in the 19th and 20th centuries: The Weimar Republic 1918–1933; Part 1. 2007, ISBN 3-598-24808-3 , p. 465 ( limited preview in Google Book Search).
  9. ↑ RGBl. I, page 185
  10. ↑ luxury . In: Der Spiegel . No. 10 , 1950, p. 4 ( online ).
  11. ↑ See http://docs.mises.de/Mises/Mises_1921_05_13_N8UB.pdf
  12. ^ Monti: Italy in "economic emergency" . In: Handelszeitung , December 14, 2011. Accessed December 17, 2011.
  13. ↑ Legge di conversione del decreto “salva-Italia” (PDF; 520 kB) LexItalia.it