Luxury Item


DEFINITION of 'Luxury Item'

An item that is not necessary for living, but is deemed as highly-desired within a culture or society. The ability to purchase or finance a luxury item is directly proportionate to ones' income or assets. In other words, as people move into higher income brackets they are more able and more likely to purchase more expensive luxury goods.

Luxury items are also known as "positional goods" because they signal that the owner has achieved a certain position or status within society to be able to afford them.


Certain luxury items may be subjected to a specific tax or "luxury tax." For example large or expensive recreational boats or automobiles can be subject to a federal tax. The U.S. levied a luxury tax on certain automobiles in the 1990s but ended the tax in 2003. Luxury taxes are considered progressive because they typically only affect people with high net wealth or income.

  1. Sales Tax

    A consumption tax imposed by the government on the sale of goods ...
  2. Status Symbol

    A status symbol is an object which is meant to signify its owners' ...
  3. Luxury Tax

    A tax placed on products or services that are deemed to be unnecessary ...
  4. Sin Tax

    A state-sponsored tax that is added to products or services that ...
  5. Gas Guzzler Tax

    An additional tax on the sale of vehicles that have poor fuel ...
  6. Income Elasticity Of Demand

    A measure of the relationship between a change in the quantity ...
Related Articles
  1. Budgeting

    Stop Keeping Up With The Joneses - They're Broke

    Conspicuous consumption could be robbing you of future wealth.
  2. Savings

    5 Resources To Learn To Retire Rich

    Find out what you need to know to plan for retirement, and which resources do the best job of showing the way.
  3. Savings

    Financial New Year's Resolutions You Can Keep

    Start the year off right by evaluating your financial health and setting impactful and achievable goals.
  4. Mutual Funds & ETFs

    Investing In Leisure Funds

    If you thought investing and fun don't go together, think again. Find out more here.
  5. Professionals

    Warren Buffett's Frugal, So Why Aren't You?

    The Oracle of Omaha has a net worth in the billions, but his lifestyle is not as rich as you may think.
  6. Options & Futures

    3 Simple Steps To Building Wealth

    Getting richer is easier if you take it one step at a time.
  7. Options & Futures

    Socially Responsible Investing Vs. Sin Stocks

    Can your principles make you richer or poorer? Find out if it pays pick your portfolio based on ethics.
  8. Options & Futures

    10 Steps To Retire A Millionaire

    Making this dream come true takes work, but it's well worth the effort.
  9. Personal Finance

    McMansion: A Closer Look At The Big House Trend

    The average home size is now 2,500 square feet - how big should you go?
  10. Retirement

    Plan To Retire Rich

    Don't just hope for the best - develop a course of action to achieve your goals.
  1. Marginal propensity to Consume (MPC) Vs. Save (MPS)

    Historically, because people in the United States have shown a higher propensity to consume, this is likely the more important ... Read Full Answer >>
  2. Is Japan an emerging market economy?

    Japan is not an emerging market economy. Emerging market economies are characterized by low per capita incomes, poor infrastructure ... Read Full Answer >>
  3. Are Social Security payments included in the US GDP calculation?

    Social Security payments are not included in the U.S. definition of the gross domestic product (GDP). Transfer Payments For ... Read Full Answer >>
  4. What economic indicators are important to consider when investing in the retail sector?

    The unemployment rate and Consumer Confidence Index (CCI) rank as two of the most important economic indicators to consider ... Read Full Answer >>
  5. How do changes in interest rates affect the spending habits in the economy?

    Changes in interest rates can have different effects on consumer spending habits depending on a number of factors, including ... Read Full Answer >>
  6. What is the difference between an OEM (original equipment manufacturer) and a VAR ...

    An original equipment manufacturer (OEM) is a company that manufactures a basic product or a component product, such as a ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  2. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
  3. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  4. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  5. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  6. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
Trading Center