Neither of those are the case. Work it through. Government spends $100. My spending is your income less tax. Your spending is my income less tax. The tax rate

Neither of those are the case. Work it through. Government spends $100. My spending is your income less tax. Your spending is my income less tax. The tax rate is 1%. Run out the maths, and see what tax you get. As you can see it doesn't mean less tax revenue. It means it moves to a different transaction. Then work out how it gets delayed.