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

What you’re talking about – using taxes instead of monetary policy to control the balance between inflation and unemployment is called Modern Monetary Theory if you’re looking for further reading. (Not an ELI5 but then nothing else in this thread is…)