When state legislators consider increasing taxes, they must consider the issue of tax elasticity. What does this mean? Tax elasticity has to do with how responsive consumers are to changes in price; goods that have inelastic demand could result in higher tax revenue since consumers are less responsive to increased costs tax elasticity has to do with how large the poulation of taxpayers is; the greater population, the higher revenue states will see from tax increases Tax elasticity has to do with how responsive consumers are to changes in price; goods that have inelastic demand could result in lower tax revenue since consumers are much more responsive to increased costs. Tax elasticity has to do with how responsive consumers are to changes in price; goods that have elastic demand could result in lower tax revenue since consumers are less responsive to increased costs