5 ms·

If any given org is a monopoly, I'd fully expect that org to pass any new costs on directly to their captive consumers. Monopolies ought to be actively broken,

• snidane 8y ago
  Good point, but it is wrong. That applies to sales taxes. Not to monopoly taxes. In well functioning market with many competitors, the price of good would be determined as costs + margin. Over time given enough competition the price should converge to that sustainable minimum basically. If you introduce sales taxes into the equation, then obviously you hike up the cost, therefore you shift this minimum. Monopoly goods prices are not determined by cost, because there is no competition which would make it go lower over time. Monopoly prices on the other hand have opposite tendency - ie. to maximize to the point where almost all disposable income of its customers gets eaten up. That's why you get the phenomenon of rents being ever so higher. They just catch up to increases in wages and eat it all away. There is no sufficient competition to compete the price away, simply because there is not enough land to house the people, especially in cities. House rents are the biggest of the monopolies, because everyone has to pay it and often it is significant portion of a paycheck. Back to the point. Introducing monopoly taxes has the exact opposite effect - it lowers the prices for consumers. Explained further here http://blog.lvrg.org.au/2011/08/why-land-tax-cant-be-shifted-onto.html http://blog.lvrg.org.au/2011/08/why-land-tax-cant-be-shifted...