Does higher tax on luxury goods does more harm than benefit?
Luxury goods tend to be Veblen goods, so reducing taxes on them doesn't make them more attractive. They also tend to be goods whose value is mainly based on scarcity, so increasing demand doesn't increase the amount supply, it just increases the equilibrium price.  If diamonds were cheaper, would there be significantly more diamond jobs? 

There's the further issue that taxes just move money around. Giving rich people a tax break means either raising taxes on poorer people, reducing government spending, and/or deficit spending (which reduces the amount of capital available for private investment).