MCViewPoint

Opinion from a Libertarian ViewPoint

Capitalism Turns Luxuries Into Necessities | Mises Wire

Posted by M. C. on March 23, 2019

Finally, critics of luxury expenditures allow their loathing of the rich to blind them to the fact that many of their working class neighbors are employed making luxury items.

Recall the “yacht tax” of 1990? In an effort to soak the rich deciding to buy an expensive boat, the federal government imposed a 10 percent tax on the purchase of boats valued over $100,000. Predictably, the sale of such boats plummeted, and an excess of 100,000 blue collar jobs were eliminated. The rich were still rich, but many working class people were driven to the unemployment line.

https://mises.org/wire/capitalism-turns-luxuries-necessities

Bashing the rich is all the rage these days. In a clear appeal to envy, Democratic leaders are trying to outdo each other with escalating bids on how much of rich’s wealth should be stolen by government.

In one tweet, Elizabeth Warren called out a billionaire NFL owner for paying $100 million for a “superyacht,” insisting that instead he should be paying Warren’s proposed “Ultra Millionaire Tax” to those less wealthy.

The wealthy’s purchase of luxury items invites scorn from statists looking to tax their wealth, as well as those believing it is crass consumerism to indulge in such unnecessary extravagance.

How Luxury Goods Benefit Everyone

But the wealthy’s purchase of “luxury goods” serves a social purpose.

For starters, as Ludwig von Mises wrote, today’s luxuries turn into tomorrow’s necessities.

Indeed, years ago, people would say ‘nobody needs such luxuries’ about things like air conditioning, air travel, telephones, color TV, refrigerators, and other items that are common household items now owned by the masses. Never mind modern items like the internet, laptops and smartphones that sci-fi writers a generation ago couldn’t have conjured up in their wildest imaginations that are now taken for granted and virtually considered necessities for the common man.

As Mises related in a passage from his 1962 book Economic Freedom and Interventionism:

About 60 years ago Gabriel Tarde (1843–1904) the great French sociologist, dealt with the problem of the popularization of luxuries. An industrial innovation, he pointed out, enters the market as the extravagance of an elite before it finally turns, step by step, into a need of each and all and is considered indispensable. What was once a luxury becomes in the course of time a necessity.

With the progress enabled by capitalism, the process by which luxuries turn into necessities is drastically shortened. “There was in the past a considerable time lag between the emergence of something unheard of before and its becoming an article of everybody’s use,” wrote Mises. “It sometimes took many centuries until an innovation was generally accepted at least within the orbit of Western civilization,” he continued, adding “Centuries passed before the fork turned from an implement of effeminate weaklings into a utensil of all people.”…

Be seeing you

tax crime

Change that to ANY TAX.

 

 

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