Question

In 1990, Congress passed a new luxury tax on items such as yachts, private airplanes, furs, jewelry, and expensive cars. The goal of the tax was to...

Answer 1

In 1990, Congress passed a luxury tax aimed at increasing revenue through taxing items such as yachts, private airplanes, and expensive cars, but it was later phased out due to its regressive nature and lower-than-expected revenue generation.

Step-by-step explanation:

In 1990, Congress passed a luxury tax which was intended to increase government revenue by taxing high-end items such as yachts, private airplanes, and expensive cars. This excise tax targeted goods typically purchased by wealthier individuals, with the expectation that it would not be overly burdensome for those at lower income levels. However, the tax was controversial because it was seen as regressive and ended up not generating the projected revenues, leading to its phase-out in 2002.