Not sure that "Taxes" is the appropriate section for this question. In engineering, self correcting refers to a system in which the system tries to operate at a fixed or constant level. For example, the cruise control on your car. If the car starts going uphill, more gas is used to maintain the speed. In taxation, unemployment benefits etc. kick in if people lose their jobs etc. so increasing government spending to support the economy. Also, if your wages fall, you move into lower tax bands and pay less as a percentage of your income (also referred to as a progressive tax system).