Is there such thing as a luxury tax?

Answer 1

Yes, but it is not always called a luxury tax; it may be called a surcharge, an excise tax, or something else entirely. It is generally triggered by the purchase of a "non-essential" (luxury) item (such as a yacht, private jet, or a high-end motor vehicle), and requires the buyer to pay taxes on the purchase at a higher overall tax rate than the rate he would have to pay if he had purchased a non-luxury item. An extra tax surcharge is imposed on all or part of the purchase price of a luxury item (and the tax laws define what constitutes a "luxury" item).

Some states impose a "luxury" tax on the purchase of cars that get too few miles to the gallon, apparently because the buyer can afford all the extra fuel he'll need to operate the car.