In order to understand the attractiveness of progressive taxation on positional goods, one needs to look into the happiness studies that are being conducted to prove the relationship between income and happiness. There is substantial evidence produced that although in the short-term happiness and income go together but in the long term there exists no relationship between happiness and income for many developed as well as for a number of developing countries.
The Easterlin Paradox, or the happiness-income paradox, is one which states that at a point in time both among and within nations, happiness varies directly with income, but over time, happiness does not increase when a country’s income increases.  The paradox suggests that income is an important predictor of individual happiness, yet apparently irrelevant for average happiness , hence, researchers have studies and concluded that individuals place greater concern with their relative position in the society rather than their absolute income.  Recent years have seen renewed interest in economic models in which individual utility depends not only on absolute consumption, but also on relative consumption. 
This shows that individuals do not just derive happiness from their individual income but individual happiness also depends on rivalrous feelings with respect to positional goods. This was proven in a survey in Sweden, where majority respondents stated that even a reduction in the absolute income was acceptable in exchange of a higher relative income. While the same respondents showed less concern about their relative position with respect to vacation days.  This means that there will be a positional gain of one individual but a positional loss of another. For the purpose of the above study, income was a positional good while vacation days are non-positional goods. To understand the same, positional good is a term used to denote goods for which the link between context and evaluation is strongest and the term non-positional good to denote those for which for which this link is weakest. 
It would be beneficial to adopt a progressive taxation policy since it is taxed on income of the individual, while consumption based taxes are based on the consumption of goods like like luxury tax, which can be avoided by consumers as they may switch to other positional goods which are not subject to such consumption based tax. For example, expensive SUV’s, were classified as trucks and thus were exempt from the luxury tax on cars, saw a dramatic increase in sales during the Clinton years. Hence, as seen above, identifying specific goods as luxuries is an impossible tax for imposition of a consumption based taxation policy. In light of the large number of consumption items that have a significant positional component, it makes sense to adopt a general progressive income (or consumption) tax rather than a series of taxes on luxury items.  A steeply progressive consumption tax is a luxury tax that sidesteps the need to identify specific goods as luxuries. Implementing a progressive consumption tax would be straightforward. Taxpayers would report their incomes to the tax authorities just as they do now. They would also report how much they had saved during the year, much as they do now in order to exempt money deposited in retirement accounts. People would then pay tax on their “tax-able consumption,” which is just the difference between their income and their annual savings, less a standard deduction. Rates at the margin would rise with taxable consumption. If the tax were revenue neutral, marginal rates at the top would be significantly higher than current marginal tax rates on income. 
The concept of progressive taxation is one based on the principle of ability to pay. Since the theory is based on the concept of ability to pay, the taxation policy is imposed on the income of the citizens and hence, does not provide an opportunity for the high-income individuals to avoid taxes that are consumption based like luxury taxes as was done in the USA as mentioned earlier. The theory of progressive taxation is supported by the economic and psychological research that determines the declining marginal utility of income in the long term.
A policy based on the progressive taxation theory provides for a systematic redistribute resources and assets in reducing the inequality in a country, especially those countries where there is a large discrepancy in the pre-tax income. Hence, it is logical to conclude that adopting a progressive taxation system will cause maximum benefit and contribution towards the economy as well as towards welfare of the society. This is because in a progressive taxation system the high income earning citizens of the country will be paying a higher tax amount, that they can afford to, while the poor will have a lower tax burden and hence make some additional saving, such an additional saving will provide a higher unit of happiness among the low-income earning citizens of the country.
However, happiness research suggests that additional income spent on positional goods may have little impact on overall welfare in a society because the positional gains by one individual will be offset by the positional losses of another. 
 Richard A. Easterlin, Laura Angelescu McVey, Malgorzata Switek, Onnicha Sawangfa, Jacqueline Smith Zweig. (2010). The happiness–income paradox revisited. Proceedings of the National Academy of Sciences. 107 (52) 22463-22468; DOI: 10.1073/pnas.1015962107
 Betsey Stevenson and Justin Wolfers, Economic Growth and Subjective Well-Being: Reassessing the Easterlin Paradox, Brookings Papers on Economic Activity, Vol. 2008 (Spring, 2008), pp. 1-87, https://www.jstor.org/stable/27561613
 Thomas D. Griffith, Progressive Taxation And Happiness, 45 B.C.L. Rev. 1363 (2004), http://lawdigitalcommons.bc.edu/bclr/vol45/iss5/11
 Robert H. Frank, The Progressive Consumption Tax as a Positional Arms Control Agreement, Proceedings. Annual Conference on Taxation and Minutes of the Annual Meeting of the National Tax Association , Vol. 101, 101st Annual Conference on Taxation (November 20-22, 2008), pp. 398-403, https://www.jstor.org/stable/10.2307/prancotamamnta.101.398
 REDRIK CARLSSON ET AL., Do You ENJOY HAYING MORE Than OTHERS? SURVEY EVIDENCE OF POSITIONAL Goons 11-12 (GOteborg Univ. Dept. of Econ., Working Papers in Economics No. 100, 2003), available at http://www.handels.gu.se/epc/archive/00002855/ 01 /gunwpe0100.pdf.
 See Id. at 4
 Robert H. FRANK, LUXURY FEVER 68-71 (1999).
 See Id. at 3
 See Id. at 4
 See Id. At 3