I like the stuff I buy. If you raise my taxes, I will probably consult a little more so I can keep buying that stuff. This is the income effect being more important than the substitution effect. I know that it is for me, and I am pretty sure it is for lots of others, as well.
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Agreed.
On the other hand, my wife just retired and I lost one of my part-time jobs. We will be cutting back.
That's correct
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