I'm not against undercutting, I'm against rampant undercutting. The kind which has seen items fall from 5k to 100g in the space of a day.

If you're taxed for adjusting prices, then that makes you think twice about adjusting prices. Prices become much more stable because of that. Undercutting still happens, it just happens when a new supply enters the market, supply and demand being the most basic principle in economics. Items would have much more stable prices with such a tax, because people would sooner wait for it to sell than eat a tax. New supply would drive the price down, that's the way it should be, not "Impatient sellers who camp the market drive the prices down into oblivion" like we're seeing now. Do you get punished if you misjudged the market? Sure. You put something up for such a price that there is no demand for it, you'll have to eat that tax to adjust to a reasonable price. That's actually a good thing. It means you don't over price, because you'll likely get taxed. Prices fall to much more reasonable levels faster so as to avoid taxes, and undercutting becomes considerably less rampant resulting in much more stable prices. Win-win.