Respuesta :
The paying of taxes drains off some of the additional consumption spending created by the increases in income.
If a tax is implemented on consumption, the value of spending an hour at work decreases in relation to different activities as the tax decreases the actual amount of goods and services an individual can purchase.
Taxes influence consumer decisions and buying power as this causes individuals to have less disposable income to spend. Thus, when taxes are applied to goods that consumers purchase, they are spending more for individual items.
Hence, this means that many consumers must weigh their opportunity costs and decide between items to purchase.
To learn more about consumption spending here:
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