It’s not wasted in the slightest. That’s why it’s absolutely a loss.

A loss, felt in particular, by the many thousands of people employed in the vast supply chain which is the yacht building industry.

I’m not sure what you mean by production being “invested to further increase productivity” - seems like a non-sequitur.

This is the lump of labor fallacy in reverse isn't it? Those people would eventually be employed by other industries - both the labor and $ formerly going to yachts would be used somewhere else.

How is building yachts for people who demand it more wasteful than producing perfumes, collectibles or nicer lamps? Who gets to decide what is waste as long as there is demand?

In a democracy, ultimately the public should get to decide. Even if "taxing yachts" is not a win for the economy it might be a win for society. The USA is way too timid when it comes to using the tax code to incentivize and shape companies' and people's behavior. We really need to "re-internalize" the costs that big business and the rich externalize onto the public, and one way to do this is to impose very narrowly-directed taxes at things that the public bears but doesn't benefit from.