Taxation and competition

Basic question. Taxing oil company profits seems to be the latest fashion trend on the left. This got me thinking about what effect increased taxation would have on an industry. Would it be accurate to say that taxation decreases competition? The more profits are taxed, the less incentive marginal producers have to stay in the industry?

I believe that is correct.

Taxation may also incur cost-cutting, such as firing people, thus creating unemployment.