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CR - Weaken assumption using addl. evidence

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by karthikpandian19 » Thu Jul 12, 2012 7:39 pm
Neighboring counties X and Y both have progressive income tax systems, where the portions of income that exceed certain thresholds are taxed at progressively higher rates (called marginal tax rates). The highest marginal tax rate for business income in County X is 38%, while the highest marginal tax rate for business income in County Y is lower, at only 30%. Therefore, County X receives more tax revenue from its businesses than does County Y.

Each of the following statements, if true, would weaken the conclusion of the argument EXCEPT:


(A) Most businesses in County X are small businesses that pay taxes at a rate significantly below the highest marginal rate.

(B) Because the highest marginal tax rate is lower in County Y, businesses that earn the most income choose to incorporate and pay taxes in County Y.

(C) The tax code in County Y defines business income much more broadly than the tax code in County X does.

(D) Businesses in County X earn more income on average than businesses in County Y do.

(E) The lowest marginal tax rate for business income is much higher in County Y than in County X
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by Bill@VeritasPrep » Thu Jul 12, 2012 8:28 pm
Conclusion: more business tax revenue in X than in Y due to the relative marginal tax rates.

A--weakens by showing that the top rate does not necessarily reflect actual tax revenue

B--weakens by showing a way that Y could still receive more revenue through a lower top rate (if high-earning businesses choose Y, Y could receive more revenue)

C--weakens by showing a way that Y could still receive more revenue through a lower top rate (if more income is defined as business income, more taxes are paid)

D--correct; this could strengthen the conclusion.

E--weakens by showing a way that Y could still receive more revenue through a lower top rate (if many companies fall into the lower bracket, they will pay more in Y than in X)
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by karthikpandian19 » Tue Oct 09, 2012 5:29 am
OA is D
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by gmat6087 » Wed Oct 10, 2012 7:00 am
karthikpandian19 wrote:OA is D
Thanks for posting such beautiful questions. Really helps gmattakers to practice a lot.

Keep up the good work
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