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This relies on the assumption that landlords are not already charging close to the max of what they think the market will - optimizing their earnings. I do not

• nybble41 8y ago
  Individual landlords are indeed already setting their prices to maximize revenues. The limiting factor is competition—if one landlord arbitrarily increased prices, tenants would defect to other landlords, reducing revenues. However, if a tax or regulation is imposed which increases costs for all landlords then they will all raise prices simultaneously (or go out of business), so tenants can't just move somewhere else. As the landlords' profits will already be marginal, the majority of the tax can thus only be paid by the tenants. The idea that a significant portion of a tax will be payed by producers is only realistic in non-competitive markets where producers receive a nontrivial economic profit (revenues minus opportunity cost). In competitive markets, producers' economic profit approaches zero.