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FUR BUYERS RUSH TO BEAT DEADLINE

The fur salon of Joseph Palanker & Sons Inc. this week has been filled with wealthy customers trying to beat the federal tax on luxuries that kicks in next month.

"Men are all over the place picking out coats," said Marvin Palanker, owner of the fur maker and retail operation.

Luxury car dealers and jewelers also said customers with the money to buy high-priced items are bargain-hunting now, hoping to avoid the hefty tax increase that will boost the price of their purchases by thousands of dollars.

The luxury tax, along with the excise taxes on alcohol, tobacco and gasoline and an income tax increase for the wealthy, are part of the federal deficit-reduction plan approved this fall.

The luxury tax portion of the plan places 10 percent surcharges on private cars over $30,000; private aircraft over $250,000; boats and yachts over $100,000, and jewelry and furs over $10,000.

After Jan. 1, pearl gray chinchillas and deep brown sable furs priced at $10,000 and up will cost at least $1,000 more.

"Because of the impending tax, we're selling four times the amount we sold in that category last year," Palanker said, adding that he couldn't disclose last year's sales without lengthy calculations.

The new taxes have come at a difficult time, since most retailers are looking at a disappointing Christmas. Additionally, sales in the taxed areas of furs, automobiles, alcohol and jewelry have dropped, along with total spending.

At this rate, the government makes 18 percent off the purchase, while the retailers makes about 10 percent, said George E. Teufel, of George Teufel & Sons Inc. a jeweler at 361 Delaware Ave.

Teufel said he recently sold one of the few $10,000-plus items he sells a year because of the tax.

Tad Matthews, president of Rich Marine Sales, also sells few boats in the $100,000-plus range but fears what the tax will do to the boating business.

"It's going to be tough on the industry," he said. "They'll feel it immediately. They're felling it now."

Rich Marine handles $25,000 to $35,000 boats that range from 22 feet to 25 feet.

The gasoline tax, which hiked the nine-cent tax by five cents, plus existing and proposed user fees, licenses and recreation fees, also will take a toll.

The retailers contradicted notions that the rich have such deep pockets that they will always buy without regard to price.

"The rich didn't get rich because they were dumb," said Albert J.X. De Blok, general manager of Culligan Auto Place, which sells Porsches, Audis and Volkswagens.

Sales of cars like the $60,000 and $80,000 Porsche have outstripped last year's at the Williamsville dealership. The tax on those cars would be between $6,000 to $8,000, De Blok said.

Culligan advertised extensively in local newspapers and direct mail to inform customers about the new tax, De Blok said.

"It's amazing how many people don't know about it," he said. "We got many calls saying: 'what is this luxury tax and how does it affect me?' "

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