You're correct, there is nothing stopping them from lowering costs right now, aside from market competition. If prices on the exact same item are different between Target and Walmart, for example, the market trend is generally toward the retailer with the lowest price (excluding external factors such as time/distance, familiarity, etc). However, as taxes (or any realized cost of doing business, for that matter) goes up, the pressure from investors/shareholders goes up, necessitating these moves sooner than later.

Jacking up taxes or the cost of labor, materials, energy or compliance will be offset by things I've already stated ad nauseum. Business will do what it does and continue to grow wealth at the top and keep the rest of us as complacent as possible.