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

The RBA or reserve bank in most demographic countries are not controlled by the government but an independent organisation so that political parties are not able to influence decisions made by the bank.

Increasing tax would effect a response, one that might – and I use the term might achieve a similar response, but it’s not going to be popular with anyone.