Taxes have a big impact on how much money people have to spend. When taxes go up, people usually have less money left over after paying for necessities. This can make them spend less, which can hurt the economy and slow down its growth.

This situation can lead to problems for businesses and everyone as a whole.

Challenges:

• People feel less confident about spending money.
• There’s less demand for products and services.
• The chance of a recession (a slowdown in the economy) increases.

Solutions:

• Lowering taxes can help encourage people to spend more.
• The government can invest in important services to help boost economic activity.