If you reduce the 1" line to 1/2" at the tank (effectively a nozzle), you will decrease flow and increase velocity. If you reduce to 1/2" pipe right at the pump you will probably have large friction losses which will significantly decrease flow and of course have less velocity than above example.
Any restrictions put back pressure on the pump, which reduces flow, which will lower the power draw by the pump (its not working as hard). It is not harmful as long as there is a reasonable amount of water passing thru the pumphead.
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