Critical Reasoning

Because more people are evading income taxed by not declaring taxable income, tax collectors are planning to increase the amount of taxed they collect by diverting a higher percent of audits to taxpayers who are not in the tio ten percent of income levels. the rate of taxation, the categories of tax exemptions, and the income based tax brackets will not changed. Tax specialiss research shows that both taxpayers and tax collectors will benefit if the tax collectors' plan is implemented

which of the following if true provides the strongest evidence that the amount of income tax collected is likely to decline if the plan is institited.

A. under the new plan, a taxpayer in the bottom ninety percent of income levels would be about 1/3 more likely to be audited than under previous practice
B. many of the taxpayers who most aggressively evade taxation are those who earn primary investment income
C. taxpayers in the top ten percent income bracket are unlikely to declare less taxable income because of this plan
D. the percentage of income tax owed that taxpayers evade is approximately the same among the top 10% of all earners as it is among the bottom 90%
E. tax evasion rates ramain constant from year to year

can [spoiler]you please explain me why the answer is D instead of B. i chose B because of this sentences in the text " y diverting a higher percent of audits to taxpayers who are not in the tio ten percent of income levels"[/spoiler]

answer is D.
the question asks that which option will help support the fact that the income tax will decline if the plan is executed.


from the passage, the plan is to collect more money from people who are not in the top 10% of income. hence, we need to make sure that the rest of the population (90%) evades income tax in the same way as the top 10%

b only explains a reason, we are not concerned with that reason.

1. More people are evading taxes
2. Tax collectors plan to devote more audits to the lower 90% of income earners
3. People will benefit from the new plan

A. Incorrect. Tells us nothing about what will happen to the collected taxes

B. Incorrect. The fact that investment income is a big way that people make money has no bearing on income

C. Incorrect. If they are unlikely to declare less then it provides evidence in favor of the plan

D. Correct. If the percentage owed is as high among the top 10% as it is among the bottom 90% then the tax revenue will decline. Why is this so? Look at it this way. Say the top10% owe $100 in taxes and the bottom 90% only owe $10. Lets say 30% of the bill is evaded by the top 10% meaning the government loses $30. If the same percent is evaded in the bottom 10% its $3. High concentrated audits in the top 10% bring in $20 of that money, while $1 is recovered from the lower concentrated audits among lower earners. The new laws will see less audits amoung the top 10%. That means the government is only going to collect something like $15 of the big earners evasion while the most they can collect from the low earners is $3. Under the old law tax revenue from evaders is $21 while under the new law its only $18.

E. Incorrect. This just tells us that year over year evasion is the same, so the plan results should be the same each year.