Question

In an economic downturn, what can happen in countries that depend on high taxes to fund social programs?

Answer 1

If there's an economic downturn in a country where the taxes are very high, and those taxes are used for the funding of the numerous social programs, than the country can very quickly face high rates of poverty and maybe even an internal conflict.

If the economy suddenly starts to crumble, the people that work would not be able to support themselves with the paying of very high taxes, thus they will rebel against that in order for the taxes to be lowered down.

On the other hand, that will result in little to no funding for the social programs. That will bring in revolt in the people that are very poor and need those programs, but also the people that do not work by their will but have relied on those money.

These two sides of the picture can easily bring in a lot of violence, tensions, even a revolution.