Why do govts raise interest rates to slow the economy instead of tax rises?

Question

With interest rate rises, the people in the most debt suffer the most. With tax rises, the highest paid suffer the most, and the govt has extra revenue to help the ones struggling the most. This is never considered by any govt. Why not?

In: 1129

Answer 1

Taxes are mostly for the people. Interest rates are mostly for the businesses. When you make it more difficult for businesses to loan money, they get it more difficult to operate which in turn can slow down an economy that operates too fast and needs to be slowed down. This is often done to curb inflation.