---
entity_slug: tax_on_luxuries
evaluator: null
evaluated_at: '2026-02-23T06:29:51.350059'
overall_score: 4.2
scores:
- name: definition_precision
  value: 4.0
  max_value: 5.0
  rationale: The definition clearly distinguishes luxury taxes from other types of
    taxes by emphasizing their optional nature and lack of broader economic spillover
    effects. It precisely captures the key characteristics that make luxury taxes
    distinct in Smith's taxonomy of taxation.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: This concept is directly grounded in Book V, Chapter 2 where Smith explicitly
    discusses taxes on luxuries as a distinct category and analyzes their economic
    effects. Smith clearly contrasts luxury taxes with taxes on necessaries throughout
    his discussion of taxation principles.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: '"General Theory" is the appropriate domain placement as this represents
    a fundamental principle in Smith''s theoretical framework for taxation policy.
    The concept operates at the level of general economic theory rather than specific
    applications or mechanisms.'
- name: vsm_relevance
  value: 3.0
  max_value: 5.0
  rationale: This entity has moderate VSM relevance, most naturally mapping to S3
    (internal regulation) as a policy tool for resource allocation and economic control.
    However, it could also relate to S5 (policy/identity) as it reflects societal
    choices about what to tax and how to distribute burden.
- name: explanatory_value
  value: 4.0
  max_value: 5.0
  rationale: The entity provides significant explanatory value by illuminating Smith's
    mechanism for equitable taxation that avoids distorting labor markets or essential
    goods prices. It reveals an important structural principle about how different
    types of taxes operate within the economic system.
---

# Evaluation: Tax On Luxuries

## definition_precision — 4.0 / 5.0

The definition clearly distinguishes luxury taxes from other types of taxes by emphasizing their optional nature and lack of broader economic spillover effects. It precisely captures the key characteristics that make luxury taxes distinct in Smith's taxonomy of taxation.

## source_grounding — 5.0 / 5.0

This concept is directly grounded in Book V, Chapter 2 where Smith explicitly discusses taxes on luxuries as a distinct category and analyzes their economic effects. Smith clearly contrasts luxury taxes with taxes on necessaries throughout his discussion of taxation principles.

## domain_placement — 5.0 / 5.0

"General Theory" is the appropriate domain placement as this represents a fundamental principle in Smith's theoretical framework for taxation policy. The concept operates at the level of general economic theory rather than specific applications or mechanisms.

## vsm_relevance — 3.0 / 5.0

This entity has moderate VSM relevance, most naturally mapping to S3 (internal regulation) as a policy tool for resource allocation and economic control. However, it could also relate to S5 (policy/identity) as it reflects societal choices about what to tax and how to distribute burden.

## explanatory_value — 4.0 / 5.0

The entity provides significant explanatory value by illuminating Smith's mechanism for equitable taxation that avoids distorting labor markets or essential goods prices. It reveals an important structural principle about how different types of taxes operate within the economic system.
