If taxation becomes more progressive, the built-in stability in the economy will increase.

Question

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When taxation becomes more progressive, it means that those with higher incomes are paying a higher percentage of their income in taxes. This redistribution of wealth can increase the overall demand in the economy since those with lower incomes are more likely to spend their additional income. This increased demand can lead to a more stable economy overall. Additionally, more progressive taxation can reduce income inequality which can lead to a more stable and cohesive society.

If Taxation Becomes More Progressive, the Built-In Stability in the Economy