The statement appears to have a misunderstanding in its logic. Tax increases are typically used to increase government revenue, which can then be allocated to various public services and programs, such as infrastructure, education, and healthcare. By raising taxes, the government can fund its spending rather than reduce it.
However, some perspectives suggest that increasing taxes can lead to reductions in spending in a different context. For instance, if increased taxes are aimed at lowering the deficit or managing public debt, it could result in a tightening of government budgets, potentially leading to reduced spending in certain areas. Additionally, higher taxes might discourage consumer spending and investment by individuals and businesses, which could affect overall economic activity.
In summary, while tax increases can provide more funds for government spending, they do not directly reduce spending. Instead, their relationship with government spending is more about reallocating or managing fiscal resources.