Even if you have an absolute monopoly, new businesses can start up which provide these necessities at the true market value. That business will do better than the one that arbitrarily price fixes and so following the money, more competition will enter the market due to the desire to buy at this lower price. I did spend 2 years learning this. I'd draw a diagram but I don't have a scanner.
Hong Kong is an example of where it works. Though, like a fair amount of what I say, the flat tax rate works better the freer the market is. The Adam Smith Institute did say there would be £50bn shortfall for the first two years with a flat rate of 22% (which I'm guessing is the optimal amount), true, however this doesn't take into account the new businesses that would relocate here from the continent, which I'd be confident would make up the difference and then some. Over many years, it'd return in spades. Adam Smith proposal also included people on low income not paying tax.
Actually it becomes harder to avoid tax with a flat tax rate as well as being fairer for large businesses. How do you fit your business into lower tax brackets if there aren't any? Flat tax of business without flat tax of individual income would make for some interesting scenarios where you could lower your tax by putting x amount into a business to be paid to you until you hit a soft cap for personal income and the rest then paid directly to yourself. The reason I mentioned individual tax is because it goes into making a flat tax more cost effective.
My first A-levels were centered around Economics and although my preference is by far micro, I guess enough macro sunk in that I've retained at least a partial interest in it.
