What ways does the government uses taxes and spending to stabilize the economy?

Taxes are a needed evil. They NEVER help an economy. They can prevent one from growing. They can be used to slow an economy. Taxes hurt the people that pay them.

A over taxed economy fails. A heavily taxed economy slows to stagnation.

If you want to kill an economy and change the direction of a country, step one is tax it to death.