Tax justice focus
Fourth Quarter 2022 ■ Volume 12 ■ Issue 2

Tax and monopoly

Reframing tax policy to reset the rules of the monopoly game
Editorial by Niko Lusiani 

Monopolists and rentseekers have been running rings round the democratic fiscal state for decades. It is obvious to everyone that the game is rigged. But we still have a few more rolls of the dice. Let’s use them wisely.


How local, state, and federal tax policies in the us undermine small business and fuel corporate concentration
Stacy Mitchell and Susan Holmberg

For decades the United States’ tax system has favoured large corporates over locally embedded and competitive firms. The resulting social and economic costs of monopoly are artefacts of the political process and can be reversed by government action.


Corporate taxation to curb monopoly power: a brief history and a proposal
Reuven Avi-Yonah

Corporate income tax in the United States was originally introduced as an antitrust measure. A steeply progressive version of the same tax would reduce the economic and political power of monopolists and reintroduce competition in an economy increasingly burdened by rent extraction.


Taxing unearned profits
George Dibb

For too long policymakers have failed to distinguish between productive profits and rents derived from market concentration and the control of scarce resources. A revived anti-monopoly movement must make full use of this difference to ensure that taxes encourage investment while eliminating rent-extraction as a business model.


Making sense of abnormal, excess, non-routine, super-normal, residual, and windfall profits
Allison Christians

As some companies reap outsize profits while consumers struggle to keep pace with inflation following the pandemic and Russia’s aggression against Ukraine, lawmakers around the world have been considering whether and how to respond.


Billionaire market power: how could an individual wealth tax curb corporate consolidation in the us?
Niko Lusiani and Emily DiVito

Concentrated control of large corporations has created vast fortunes over the last four decades and fueled the drive towards market domination. Here Niko Lusiani and Emily DiVito consider how the tax system could be used to shift incentives and broaden ownership beyond a handful of latterday robber barons.


Book review
The Profit Paradox: How Thriving Firms Threaten the Future of Work, by Jan Eeckhout
John Christensen

As the post-war Keynesian consensus frayed in the 1970s, prominent Chicago school lawyers like Robert Bork argued that firms become large because they are efficient, largely due to economies of scale. Sure, they conceded, this might allow some firms to make excess profits, but those profits will feed through to more jobs and higher wages. Unfortunately, as Eeckhout argues in this readable and cogent book, the opposite is true. When technology change allows a firm to establish a dominant market position, its power to extract excess profits is not good for its consumers, its suppliers, its workers, nor, alarmingly, for democracy. This is what Eeckhout calls the Profit Paradox.

This special edition of the Tax Justice Focus is co-published with: