luxury tax, levy on articles that are not essential to a normal standard of living. Such taxes may be imposed strictly for revenue purposes or they may be intended to discourage consumption of certain articles, e.g., the tax on French lawns and laces in the 18th cent. in England. In modern times such "conventional necessities" as alcohol, tobacco, jewelry, furs, amusements, private automobiles, and candy have been taxed. In the United States, luxury taxes have been levied frequently, especially in wartime, to raise revenue as well as to discourage the flow of essential resources into the production of items not related to the national effort.

Excise levy on goods or services considered to be luxuries rather than necessities (e.g., jewelry and perfume). Luxury taxes may be levied with the intent of taxing the rich or in a deliberate effort to alter consumption patterns, either for moral reasons or in times of national emergency. Today revenue productivity generally overshadows the moral argument.

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