Critical Reasoning

When people evade income taxes by not declaring taxable income, a vicious cycle results. Tax evasion forces lawmakers to raise income tax rates, which causes the tax burden on nonevading taxpayers to become heavier. This, in turn, encourages even more taxpayers to evade income taxes by hiding taxable income.The vicious cycle described above could not result unless which of the following were true?

(A) An increase in tax rates tends to function as an incentive for taxpayers to try to increase their pretax
incomes.
(B) Some methods for detecting tax evaders, and thus recovering some tax revenue lost through evasion, bring
in more than they cost, but their success rate varies from years to year.
(C) When lawmakers establish income tax rates in order to generate a certain level of revenue, they do not allow adequately for revenue that will be lost through evasion.
(D) No one who routinely hides some taxable income can be induced by a lowering of tax rates to stop hiding
such income unless fines for evaders are raised at the same time.
(E) Taxpayers do not differ from each other with respect to the rate of taxation that will cause them to evade
taxes.


OA C

A/C; C is better

if choice (A) were true then the vicious cycle would probably not occur in the first place..so that is definitely not the assumption.

on the contrary (C) is the necessary assumption for the argument to be true. negate (C) and the argument falls apart.


hope this helps

Gaurav 2013-fall wrote:When people evade income taxes by not declaring taxable income, a vicious cycle results. Tax evasion forces lawmakers to raise income tax rates, which causes the tax burden on nonevading taxpayers to become heavier. This, in turn, encourages even more taxpayers to evade income taxes by hiding taxable income.The vicious cycle described above could not result unless which of the following were true?

(A) An increase in tax rates tends to function as an incentive for taxpayers to try to increase their pretax
incomes.
(B) Some methods for detecting tax evaders, and thus recovering some tax revenue lost through evasion, bring
in more than they cost, but their success rate varies from years to year.
(C) When lawmakers establish income tax rates in order to generate a certain level of revenue, they do not allow adequately for revenue that will be lost through evasion.
(D) No one who routinely hides some taxable income can be induced by a lowering of tax rates to stop hiding
such income unless fines for evaders are raised at the same time.
(E) Taxpayers do not differ from each other with respect to the rate of taxation that will cause them to evade
taxes.

OA C

The premise is about X: People EVADE income taxes.
The conclusion is about Y: Lawmakers will be forced to RAISE INCOME TAX RATES.

The argument assumes that X causes Y: that TAX EVASION causes lawmakers to RAISE TAXES.

Answer choice C, negated: When lawmakers establish income tax rates, they allow adequately for revenue that will be lost through evasion.

If lawmakers establish tax rates that allow for tax evasion, then the conclusion that tax evasion will force lawmakers to raise taxes is invalidated.
Since the negation of C invalidates the conclusion, C is the necessary assumption: WHAT MUST BE TRUE for the conclusion to be valid.

The correct answer is C.

why the answer choice is made dark, i cannot see, why this is so??

Move your cursor over the dark answer choices and you will see the answers

Can some one describe the answer choice : D and tell why D is wrong.

one tip for CR's.
avoid answer choices that are too firm and solid (no one for the D choice)

D says ( no one will hide the tax return if tax % is reduced )
there is a possibility that ssm1 will hide..even after reducing the rates (i wd b dh fst one )

and too firm (no one)

hopt it helps!!