According to the Department of Social Services, new taxes ne

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According to the Department of Social Services, new taxes need to be generated to maintain the solvency of the state's Medical Aid program, which provides medical coverage for the state's poor and uninsured residents. The governor has proposed that a special tax be imposed on those with incomes greater than $300,000 a year to pay for the shortfalls in the Medical Aid program. While new revenues are indeed needed to maintain the Medical Aid program's solvency, the governor's plan for securing the needed funds should be rejected because it would force certain taxpayers to absorb the cost for something from which they would receive no benefit.

Which of the following, if true, would provide proponents of the governor's plan with the strongest counter to the objection that the plan is unfair?

Even with the proposed tax increase, the average tax rate on those state residents earning more than $300,000 a year would remain lower than the tax rate on those earning this same income in neighboring states.
Any attempt to raise taxes on those with incomes greater than $300,000 a year will cause the affluent to find creative ways to shelter their incomes and lower their taxes and thus will prove self-defeating.
Those earning more than $300,000 a year benefit when the state directs funding to research into curing diseases such as arthritis, cancer, and heart disease, and the funding for this research is drawn from general income tax revenues to which the all taxpayers contribute.
When the poor and uninsured go without adequate medical coverage, they avoid medical treatment until their conditions become severe, forcing hospitals to raise rates for everyone so that they can treat this population.
The only alternative way of funding the Medical Aid program now being considered is through a general state income tax surcharge, which would affect affluent and middle class taxpayers alike.

What's the best approach to verify the correct answer?

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by EconomistGMATTutor » Tue Nov 14, 2017 10:20 am
The conclusion: The governor's plan for securing the needed funds should NOT be rejected as unfair.

The evidence: There is no evidence provided, but clearly we are meant to choose an answer that shows that the plan would actually benefit those taxpayers who, according to the author, would receive no benefit. In other words, these people (with incomes greater than $300,000) WOULD receive a benefit.

Choice D shows that everyone, which includes those earning more than $300,000 a year, will be hurt financially if the plan is not approved. This supports the conclusion. The plan is a good one for everyone. It's not unfair.

Choice A brings in OTHER neighboring states. Beware the "other" choice. It's irrelevant to the argument.
Choice B does not say that the plan is fair. It just shows that people with high incomes will resort to finding ways of sheltering their income. Opponents of the plan would still say it's unfair.
Choice C starts out promising. It says that the high earners will benefit. But what will they benefit from? This choice says that they'll benefit from GENERAL income tax revenues, which is unrelated to this argument, which is about a "special tax."
Choice E is another "other" choice. This alternative plan is unrelated to evaluating the one in the argument.

I'm available for further questions.
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