Why Would The Government Collect More Taxes In A Rapidly Growing Economy?

Answer 1

Answer: You answered your own question!
Cut taxes, the economy grows, more money changes hands...
More tax revenue is generated!
Increased taxes has the opposite and proven effect!

Answer 2

Not really sure I understand the question. Are you asking if it is logical to levy additional taxes on the people when the economy is growing/expanding? In that case I say not. It defeats the purpose. Taxes on economic growth have the save effect of an interest rate hick on money supply. It reduces it. On the other hand if you’re asking why the federal treasury grows along with the economy that’s a different story.

Just as higher taxes and burdensome regulations retard progress, economic growth can cause government coffers to expand. This is because as the economy grows the tax base naturally expands. People are moving stagnant capital from tax-free investments into taxable instruments to take advantage of the potential for growth unimpeded by higher taxes. These funds are funneled back into the economy via capital investments leading to new businesses, new hires and new revenue. All of which serve to increase the tax base. The assumption that taxes fall when rates are decreased is based on a fallacious premise that assume the wealthy take every additional dollar and burry it in a mason jar out on the South 40 (acres, that is).

Higher taxes discourage investment by forcing wise people to shift income from taxable instruments to tax-free, hide income from the government and/or move income out of the country.

This simple and straightforward formula is the reason the government collects more money in expanding economies.

Answer 3

Because in a growing economy, the people who benefit the most from the growth are those who work hard, work smart, and take the chances that actually make the economy continue to grow, while some guy who puts in his eight hours then goes home, smokes a bowl, and watches 6 hours of TV will only get a slight increase in his standard of living, if any. This, according to some people, is a social injustice and we must increase taxes on the more productive people in order to make things more fair.

These same people are the ones who think the U.S. is BEHIND Europe because our taxes are lower.

Answer 4

pfft. none of this makes your religion true. lack of answers indicates a boring non relevant question, not lack of an articulate answer. no one really cares, but since you went there... court records show ct russell to be a fraudster. when asked to identify some hebrew characters, he couldn't, even tho he previously claimed he could. his wife also said he was pedo. there were 9 child sex abuse cases settled secretly in 2007 by the watchtower. i'm not even american, but when i think of free speech there, i think founding fathers, probably washington, and people like martin luthor king and malcolm x, willing to put their lives on the line for others. you present the watchtower pursuing their own interests. hitler would have changed that 1st amendment thing. did the jws go to stop him? or were you all running around saying the sky is falling and a wolf attacked the sheep. yet now the children of those who did stand up and guaranteed your 1st amendment rights, you try to turn into cripples too. shameful persecution? are you trying to claim a monopoly on persecution? you know over 100 000 "real" christians were martyred in the 1st 2 centuries after jesus? not much room left for a modern anointed class. nyway, already given too much time to this one.

Answer 5

It wouldn't if the government implemented tax cuts, as did George W. Bush, early on in his first term. But, theoretically, if the economy is booming, there is more economic activity to tax and one would expect tax revenues to go up.

Answer 6

When the economy grows, jobs increase. Wages increase. More people work and make more money, so taxes increase. They are always a percentage of earnings.

Answer 7

With more people working and paying taxes, it just stands to reason that if you increase the number of people paying, the revenues would increase. Its no different than a company increasing revenues by increasing customer base. There is no need to increase tax rates to collect more, just increase the number of taxpayers.

Answer 8

Yes more revenue needs more surplus/disposable income taht can be wringed out of citizens... but it also helps to curb inflation.

The government needs more and more money, better to get it now while the economy is good and it won't bleed as much.

Answer 9

More people are working
more taxes
more taxes, more money for the government to waste, I mean to spend

Answer 10

a growing economy means the public will demand more benefits (roads, water, sewers, services like schools, mail, etc.) and someone's gotta pay for it..... nothing in life is free, our taxes pay for everything the govt. does