The article explores whether competition with taxation is a better option than a state monopoly in certain industries. It finds that competition is preferable to a state monopoly when the monopoly has inefficiencies in production or operates at a scale where inefficiencies occur. Even when considering the social cost of consuming the product, competition can lead to higher total output compared to a monopoly, as long as the social cost is below a certain threshold. Surprisingly, the study also reveals that in both scenarios, an oligopoly is a better choice than perfect competition when compared to a state monopoly.