The main problem with taxing positional goods is that the consumption just moves to another country.

I don't have an economics degree, but:

1) governments could cooperate to tax positional goods (such as with a treaty)

2) governments could repair the reduced incentive to work hard by lowering taxes on the rich

3) these 2 would result in lower prices for non-positional goods

4) governments could adjust for lost tax revenue by lowering welfare programs because of (3)

The flaw I can think of (there are probably others) is that workers in positional goods industries might lose their jobs.

What other flaws are there or why isn't this happening already?