How do increasing tax rate helps control inflation? Also, do the opposite that is lowering tax rate controls deflation?
If the government taxes people but does not spend the money, accumulating surplus, it will decrease aggregate demand. Aggregate demand depends on consumption, which depends on disposable income and taxes reduce disposable income. A decrease in aggregate demand will decrease the price level, reducing inflation or causing deflation, if nothing else happens (see this article by Pettinger).