Luxury Tax (1990)
- Concept: "Luxury Tax" to make wealthy pay more taxes
- Plan: Price threshold for "luxury" items
- Cars: $30,000
- Boats: $100,000
- Aircraft: $25,000
- Jewelry and furs: $10,000
- Tax: 10% on part of price over threshold
- Projection: Raise $9 billion over 5 years
- History: Implemented in 1990
- What Actually Happened?
- Lots of Unintended Consequences
- Wealthy boat-buyers simply bought boats overseas
- U.S. boat sales collapsed
- at least 7,600 boat-building jobs lost in first year
- Total job losses up to 30,000
- Government paid unemployment benefits to laid-off workers
- Boat tax yielded only $3 million in 1991
- Income tax and FICA revenue lost
- U.S. boat-building industry badly damaged
- Losses probably exceeded tax revenue
- Luxury tax repealed in 1993
- Did anybody think about what might happen?
- Almost certain result of static analysis