High tax rates that put money into the government's coffers tend to slow spending, and ultimately slow the economy.

Question

Quizplus · Accepted Answer

High tax rates increase the cost of goods and services, which reduces the purchasing power of consumers and businesses. This slows down spending and reduces economic activity. As a result, the government may collect more revenue in the short run, but in the long run, economic growth could suffer.

High Tax Rates That Put Money into the Government's Coffers