The White House is reportedly considering a luxury tax on cars, fragrances, handbags, wine, liquor, and cheese.
According to an article on The New York Times, the White House is reportedly considering a luxury tax on cars, fragrances, handbags, wine, liquor, and cheese. The publication also says the tax could be 25%, where Donald Trump has already imposed a 25% tax on steel and talked about a 25% tax on luxury cars.
The luxury tax would most likely have not only have luxury fashion brands paying taxes on these items but companies like LVMH Moët Hennessy Louis Vuitton paying them with the wine and liquor companies it owns. “Luxury cars, perfume, handbags, wine, spirits, and cheese are on a list drawn up by the White House of items that the U.S. could target for tariffs,” according to an advisor to Trump with knowledge of the plans. Products coming not just from China, but France, Belgium, and Italy would be taxed.
The tax wouldn’t be much a of a surprise and people would still be able to afford the products to which The New York Times said, “to some trade warriors, luxury goods are especially appealing targets because there are readily available American-made substitutes, and affluent consumers can afford the higher prices.”
The publication continued to say that the tax might not be good for exporting countries but it wouldn’t be bad for frugal shoppers who wouldn’t be buying many of these products anyway.
Shoppers in the U.S., however, might not like the tax, which brands in other countries have said would not only cost them more but would cost shoppers more as well. Basically, wealthy shoppers might not like the tax, especially if it’s 20% or more.
Wealthy shoppers might not stop buying products because they are taxed but they may go somewhere else to buy them. Shoppers in China, where prices on luxury products are about 21% more due to taxes in the country, have been shopping for luxury products in other countries. Those shoppers made personal luxury goods in France and Italy increase to over 70% last year.
A luxury tax would increase prices on luxury products and customers might start shopping for luxury products in other countries. Many people already do, though, where prices can be lower in other countries and shoppers purchase handbags and accessories from French brand in France.
So, what do you think? Will the White House put a luxury tax on these items? Let me know in the comments below. Also, don’t forget to subscribe to get new posts sent directly to your inbox and follow me on Facebook, Instagram, and Snapchat.
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