This paper analyzes the optimal commodity tax policy, in a generalized vertical differentiation model in which consumers have positional considerations. Consumers enjoy having a product which is better than that owned by others, and feel envy when others own a better product than them. We examine the impact of these positional considerations on the optimal tax and welfare when a monopoly produces one or two variants of such good. The standard result that the government should subsidize the product, can be reversed in our setting. In the presence of positional concerns, the optimal tax rate can be positive, when the status and envy effects are strong enough. For the multiproduct monopoly: the positional effects determine the level of the tax pass-through on prices. Moreover, because of the presence of these effects, the tax levied on the high quality variant affects the price of the low quality variant and vice versa.