Will raising taxes always increase tax revenues and will cutting taxes always decrease tax revenues?
- DEBSLv 76 months agoFavorite Answer
No. Think of it in the extreme. If taxes were raised to 100% of income, then there would be no incentive for people to work. Nobody working means no taxes to collect. It works through the tax levels as well. You have to let money flow in the market to create jobs, income, spending, and therefore tax revenue.
- 6 months ago
No an increase in taxation is not the same as an increase in the government revenue.
- RICKLv 76 months ago
To a certain extent yes
Raising taxes will increase revenue up to a certain point which is 100% taxation
However any and every tax cut has reduced revenue
Currently the high income earners and the passive income earners are grossly under taxed (in the US)
The next tax law needs to tax deferred interest, qualified dividends and capital gains as regular income
- JudyLv 76 months ago
no not always - sometimes the base amount changes
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- Max HooplaLv 76 months ago
No to both. It may affect behavior that generates tax revenue
- StephenWeinsteinLv 76 months ago
No, not always. Right now, yes, because taxes are so low. Raising taxes above 90% would decrease revenue. But increasing them to normal level would increase revenue.
- 6 months ago
Somebody has to pay for all these wars and tax cuts. So yeah, raise taxes.