Lost in all the fiscal fisticuffs over the federal budget is the alarming fact that the proposed tax bill still contains the dreaded Caddytax, a 10 percent surcharge on any portion of an auto price tag exceeding $30,000.
Who can say what that will mean to life as we know it?
Nick Ogransky can. On this particular day, the 32-year-old native of the Ukraine is pondering the question in the showroom of the American Service Center in Arlington. He is standing between a royal blue Rolls-Royce Corniche III -- $215,000 -- and a Ferrari F40, the color of blood, priced at an artery-opening $1 million. Ogransky will sell you either one.
"The question, of course, is not really one of money, but of exclusivity," says Ogransky, who aspired to a career in psychiatry back in the Soviet Union and says marketing mega-cars in the United States isn't so different. A major social and psychological quest in both countries, he suggests, is the impassioned search for privilege in a society that purportedly spurns it. Cars are an obvious insignia of that privilege, both to others and, perhaps more importantly, to oneself.
"The people who buy these cars are buying membership in a select and rather small club," Ogransky says, a club whose members are, or want desperately to appear, immune to the predictions of recession that disquiet the masses. Raising the price of that membership -- via the proposed tax -- won't reduce the desirability of it, he says. "It may increase it."
With his soft Italian loafers; precise, faintly accented English (he's fluent in three other languages as well); and windswept-for-life collar-length brown hair, Ogransky radiates the sort of breezy European self-assurance that makes the average American feel both untutored and ill-bred. You may have the money, he seems to say, but I can keep you from acting unworthy of it: I have the class.
"Look," he says, "let's say you're a member of the Woodmont Country Club and you're worth about $50 million. But you know you're not really one of the big boys. And for years you've been driving up to that portico in a Mercedes or a Ferrari and it's time to get a new car. You really think you're going to worry about this tax and drive up in a Toyota?
"Would that make you look smart?
"Or just cheap?
"Think about it."
Those who think about it, Ogransky says, ultimately come to him, and not just for cars. "We have a continuing relationship, long after the sale. That's part of the deal."
As if to prove his point, he fields a call from someone he obviously knows well ("Okay, Boobie," he says to the caller at one point) who apparently is seeking advice on a car to buy for someone else -- a car in a proletarian price range.
"Just don't buy her a Miata," he sighs at length, clearly pained at the thought. "It's a death car. It's so ugly it's cute."
When he finally hangs up he identifies the caller as a major owner of high-rise real estate in Rosslyn "who calls me all the time. I'm not on retainer or anything. It's just part of servicing a customer."
Did the caller buy a Rolls-Royce from him?
"No, no, no, no," says Ogransky, shaking his head. "He has a Ferrari and three Mercedes. He wants to put his foot down and be gone."
No amount of luxury tax, he says, is going to substantially affect the purchasing philosophy of such a buyer. While the man straining to afford a $45,000 car ("someone trying to join the club, but not really ready") might be given pause by the proposed luxury tax, most of his customers, Ogransky says, will figure "if you can afford $100,000 for a car, you can afford $110,000."
As a graduate of the Marxist dialectic, Ogransky has clearly applied himself diligently to the study of wealth in the United States. ("A fresh eye for this, you see, is very helpful.") The son and grandson of Soviet army officers, he grew up in Lvov, a cosmopolitan city of 800,000 near the Polish border, over which, he says, the Russians, Austrians, Germans and Poles have been warring for 11 centuries.
His friends in school, he says, were "all very bright, but they were trying to make it in that system," a system for which Ogransky had little hope. "If you screw up that bad," he says, "and it takes you 70 years to figure that out, you think you're going to turn it around overnight?"
When he hit Washington seven years ago, he says, "I picked up a Washington Post and turned to the want ads for a job. 'Autos' were 'A' so they came first, and 'American Service Center' came first in the autos. I applied for the job here, got it, and I've been here ever since."
He married the boss's daughter, got himself a Mercedes and appears to be at least peering in the window of that "select club" he has analyzed so thoroughly, if his foot isn't already in the door. On the wall of his office is a Virginia vanity plate that says "2 HUNGRY."
But back to this car tax thing. Is he really saying that the rich don't care how much they spend for a car?
"Look, there are lots of different kinds of rich," he says, a bit impatiently. "There are some people who are very rich, but very cheap. They drive Toyotas and don't think anything about it. They don't want people to know how much they have." Such people, he implies, are not commonly found in Northern Virginia. There, he says, you basically have Old Money and New Money.
Old Money, he says, is at least third generation. It is quieter. It buys "16 or 17" Rolls-Royces a year at American Service Center, including three of the Corniche models like the one on the showroom floor with the parchment leather seats with blue piping and the climate control so sensitive one can motor from Spain to Finland without changing the setting.
"There's nothing sexy on this car," Ogransky says. "But it's luxurious and it makes a statement." Unlike Ferraris, which always appreciate in value, the value of a Rolls "drops like a stone" for the first 10 or 15 years after its purchase, Ogransky says. "But it usually stays in the same hands, or at least in the same family all that time, so averaged out, its cost becomes quite reasonable."
Except in Los Angeles and Miami, Ogransky says, New Money doesn't usually buy a Rolls. New money is more inclined toward Ferraris, of which American Service Center sells 25 or 30 a year.
Though best known as a racing enthusiast's car, many Ferraris, Ogransky says, are sold to people "with really no knowledge or appreciation of them at all. For them it's a speculation, like pork bellies."
While there is no such thing really as a tame Ferrari, most offer some street amenities like air conditioning and retail at a price in the neighborhood of $170,000. But for those seeking the outer limits of exclusivity, not to mention performance, there is the F40 coiled there on the showroom floor with its 510-horsepower, 32-valve, eight-cylinder twin-turbo engine, which sounds, when revved, like a roomful of people ripping bedsheets. It will slingshot you from zero to 60 mph in 3.4 seconds, hit a top speed in excess of 205 mph, and for its million-dollar price tag give you 12 miles to the gallon, no radio and a trunk just big enough for your wallet.
Those who share its priorities, Ogransky says, are unlikely to reflect deeply on the luxury tax that comes with it, even though the tax on this particular car -- $90,000 -- would be enough to buy a Mercedes or two.
"You work all your life to buy a car like this," Ogransky says. "You don't want to pull up at a stoplight and see some kid covered with gold chains pull up next to you in one just like it." Thus, the luxury tax may prove to be very popular with New Money, he says with a smile. "Oh, they'll bitch and holler about it. But in their hearts they know it will just make the exclusive club a little narrower. And they'll be inside and you won't."