I’m confused. I’m taking macroeconomics this semester and my professor keeps hammering the point that taxes don’t always mean the government gets more money. I’ve tried looking this up And can’t find an explanation. Can you guys explain to me how this works?
Tax doesn’t mean revenue?
byu/DynamiteGnat984 inAskEconomics
Posted by DynamiteGnat984
1 Comment
Does he mean: sometimes when you increase taxes, you disrupt market behaviour and so the market shrinks so you actually end up with less revenue even though you raised taxes. See Laffer Curve