I think LCT should apply to all luxury goods if LCT, as a concept, is to remain. People who earn in the top 2% often find ways to avoid paying tax or use every trick in the book to minimise it, so LCT is an effective way of clawing some of that back since many of these same people often don’t baulk at, or indeed actively seek out, the purchase of luxury goods in order to display their wealth. Not all of them do, of course, but it is not an uncommon thing.
In recent year luxury car brands have publicly gushed about how their sales have been skyrocketing etc. Even now during a pandemic (Exhibit A:
How the rich are driving up luxury car sales when the economy is in reverse) so clearly LCT is not stopping the wealthy from spending, so governments should take advantage of that.
I didn’t mind paying the LCT on my Model 3. I thought it entirely fair since it was an extremely extravagant purchase that is way, way beyond the means of a vast number of Australians.
What would be better in my view, though, is to remove all taxes from purely electric vehicles (and possibly plug-in hybrids) below a certain price-point. Or, alternatively, replace the LCT with a tax on all vehicles in proportion to their tailpipe emissions.