Most of the burden of a luxury tax falls on the middle-class workers who supply luxury goods, rather than on the rich who buy them.

Question

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Luxury taxes are often imposed on goods such as yachts, high-end cars, and jewelry. The manufacturers and suppliers of these goods may pass on the cost of the tax to consumers, which can disproportionately affect middle-class workers who produce or sell these items. The wealthy individuals who purchase these luxury goods may be able to absorb the added cost without major impact on their financial well-being.

Most of the Burden of a Luxury Tax Falls on the Middle-Class