The main good bit of market pricing this would miss is the demand reduction and reallocation caused by the higher prices
True. The main thing the “tax a price increase” misses is that it mutes the supply incentive effects of the price increase. I’d need to understand the elasticities of the two (including the pre-supply incentives for some goods: a decision to store more than current demand BEFORE the emergency gets paid DURING) to really make a recommendation, and it’d likely be specific enough to time and place and product and reason for emergency that “don’t get involved at a one-size-fits-all level” is the only thing I really support.
True. The main thing the “tax a price increase” misses is that it mutes the supply incentive effects of the price increase. I’d need to understand the elasticities of the two (including the pre-supply incentives for some goods: a decision to store more than current demand BEFORE the emergency gets paid DURING) to really make a recommendation, and it’d likely be specific enough to time and place and product and reason for emergency that “don’t get involved at a one-size-fits-all level” is the only thing I really support.