Taxes in general, are stupid.

If you think about it - Would you rather them pay whatever in taxes, or alternatively, go spend with that taxes?

Say a BMW costs 60,000. And, the luxury tax adds another 60,000 (being extremist). Would you rather there be the tax, or would you just rather them buy TWO BMWs?

Economically. Two BMWs are better than One BMW and tax. :x