Isn't that how it actually works in Norway and Denmark (don't know about Sweden)? "Luxury cars" are taxed like a 100%. My understanding is that Tesla's are so popular over there because those are exempt of precisely that luxury tax.

The problem with that is that it's regressive and hurts those who earn less.

Let's say sales tax is 10%. If I'm a high earner and buy a cheap Android for $50, the $5 I'm paying in sales tax has a much lower impact on my budget than it does to someone who earns less than I do and wants to buy the same phone.

That’s also a regressive tax poorer people spend more as a percentage of their income.

Yes, you’d be taxing the poor at the expense of the rich even more than today’s tax system, since spending doesn’t scale anywhere near linearly with income.

This is also why a “flat tax” is bad compared to increasing marginal tax rates. Remember that most systems don’t tax all income at the same rate; they tax anything above $a ie $(a-0) at x%, anything above $b and only that $(b-a) at (x+2)%, and so on.

Anti-tax fundamentalists use terms like “tax brackets” to trick people who don’t understand this system into thinking it’s possible for eg one’s net income to go down as they earn more money. (“Make this much, and you’ll be in the y% bracket!”) Don’t buy into this, it’s not true.