Over the past few years, retailers in the town of Statesville have suffered from decreasing sales, largely because increasing numbers of consumers, after seeing items in stock at those retailers' stores, have opted instead to purchase those items on the Internet. As a result, Statesville's local government revenues have been impacted as well. To make up the lost revenue, Statesville's mayor has proposed legislation that would require Internet retailers to charge and remit local sales taxes on all orders shipped to addresses in Statesville, at the same tax rate assessed on purchases in physical stores. If this legislation is enacted, the mayor reasons, Statesville will be able to bring its revenue back up to the level of a few years ago.
All of the following, if true, cast doubt on the mayor's conclusion EXCEPT
(A) Because they do not need to rent or maintain physical showrooms, Internet retailers generally charge substantially lower prices for most items than do physical stores.
(B) The vast majority of Statesville's residents have at least one trusted friend or family member who lives in one of the smaller towns surrounding Statesville and whom they would trust to receive their packages.
(C) Statesville's retail stores have been consistently considered the best in the county, and consequently draw a lot of shoppers from other towns.
(D) Over the next few years, the Statesville area is likely to experience a severe recession, which could reduce consumer spending by as much as 40 percent.
(E) Administering the proposed tax will increase the cost of doing business for Internet retailers, who will then pass the increased cost on to consumers in the form of slight markups on the price of merchandise.
OA E
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Over the past few years, retailers in the town of
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BTGmoderatorDC
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deloitte247
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Option A - INCORRECT.
Because they do not need to rent or maintain physical showrooms, Internet retailers generally charge substantially lower prices for most items than do physical stores. This option cast doubt on the mayors conclusion on how to generate revenue for the state.
Option B - INCORRECT.
The vast majority of Statesville's residents have at least one trusted friend or family member who lives in one of the smaller towns surrounding Statesville and whom they would trust to receive their packages. Therefore the buyer will escape the payment of Tax assigned to goods bought online.
Option C - INCORRECT.
If this claim that, ''Statesville's retail stores have been consistently considered the best in the county'' then they don't need to complain of low sales or see online stores as a competitor, because shoppers will always patronize the store due to its subsequent success of low price sales.
Option D - INCORRECT.
Over the next few years, the Statesville area is likely to experience a severe recession, which could reduce consumer spending by as much as 40 percent. However this claim does not cast a doubt on the conclusion of the mayor.
Option E - CORRECT.)
The claim in this option does not cast a doubt on the mayors conclusion. Administering the proposed tax will increase the cost of doing business for Internet retailers, who will then pass the increased cost on to consumers in the form of slight markups on the price of merchandise. However, the success of this plan will aid a vast increase in the revenue generation for the state back to the level of the past few years.
Because they do not need to rent or maintain physical showrooms, Internet retailers generally charge substantially lower prices for most items than do physical stores. This option cast doubt on the mayors conclusion on how to generate revenue for the state.
Option B - INCORRECT.
The vast majority of Statesville's residents have at least one trusted friend or family member who lives in one of the smaller towns surrounding Statesville and whom they would trust to receive their packages. Therefore the buyer will escape the payment of Tax assigned to goods bought online.
Option C - INCORRECT.
If this claim that, ''Statesville's retail stores have been consistently considered the best in the county'' then they don't need to complain of low sales or see online stores as a competitor, because shoppers will always patronize the store due to its subsequent success of low price sales.
Option D - INCORRECT.
Over the next few years, the Statesville area is likely to experience a severe recession, which could reduce consumer spending by as much as 40 percent. However this claim does not cast a doubt on the conclusion of the mayor.
Option E - CORRECT.)
The claim in this option does not cast a doubt on the mayors conclusion. Administering the proposed tax will increase the cost of doing business for Internet retailers, who will then pass the increased cost on to consumers in the form of slight markups on the price of merchandise. However, the success of this plan will aid a vast increase in the revenue generation for the state back to the level of the past few years.
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When you're looking to WEAKEN (cast doubt) on an argument, you must first find where the chain of logic is broken. Look for an unstated assumption that would be needed to connect the premises to the conclusion.
Premises:
- retailers in the town of Statesville have suffered from decreasing sales
- consumers, after seeing items in stock at those retailers' stores, have opted instead to purchase those items on the Internet
- local government revenues have been impacted
- legislation would require Internet retailers to charge and remit local sales taxes on all orders shipped to addresses in Statesville
Conclusion:
If this legislation is enacted, Statesville will be able to bring its revenue back up to the level of a few years ago.
Missing Assumptions:
- Assuming it's feasible: does the mayor have the authority to impose legislation on companies outside its borders? Will companies comply?
- Assuming same $$ in sales & taxes: are consumers purchasing items for the same dollar amount, incurring the same tax?
- Assuming mailing addresses replicates in-person buyers: the taxes are levied on ppl with Statesville addresses. But are all the consumers who were buying in-person before actually *from* Statesville? Or were they traveling there to shop? And for Statesville residents, can they get around this buy using a different address?
- Assuming no other changes over time: the mayor concludes that the legislation will bring revenue back to the level of a few years ago. But are there any other societal changes that might hinder this? Has the economy changed?
To weaken the argument, we need a new piece of evidence that attacks one of these missing assumptions. Eliminate any answers that attack these assumptions.
(A) Because they do not need to rent or maintain physical showrooms, Internet retailers generally charge substantially lower prices for most items than do physical stores.
Yes, this attacks the assumption that we'll get comparable tax revenue. Eliminate.
(B) The vast majority of Statesville's residents have at least one trusted friend or family member who lives in one of the smaller towns surrounding Statesville and whom they would trust to receive their packages.
Yes, this attacks the assumption that we can use Statesville addresses to replicate the in-person revenue we had before.
(C) Statesville's retail stores have been consistently considered the best in the county, and consequently draw a lot of shoppers from other towns.
Yes, this attacks the idea that using Statesville addresses will mirror in-person sales. The former out of town shoppers won't be taxed under this legislation.
(D) Over the next few years, the Statesville area is likely to experience a severe recession, which could reduce consumer spending by as much as 40 percent.
Yes, this attacks the assumption that there were no other changes to the economy. With a recession, even new tax legislation likely won't bring us back to the tax revenue levels of a few years ago.
(E) Administering the proposed tax will increase the cost of doing business for Internet retailers, who will then pass the increased cost on to consumers in the form of slight markups on the price of merchandise.
This has no direct bearing on Statesville. These markups likely would be spread to all consumers, and we don't know whether it would be enough of a markup to deter online purchasing. Regardless, the tax money would be going to Statesville, increasing revenue, so this doesn't attack the mayor's plan.
The only answer choice that does not attack one of the missing assumptions is E.
Premises:
- retailers in the town of Statesville have suffered from decreasing sales
- consumers, after seeing items in stock at those retailers' stores, have opted instead to purchase those items on the Internet
- local government revenues have been impacted
- legislation would require Internet retailers to charge and remit local sales taxes on all orders shipped to addresses in Statesville
Conclusion:
If this legislation is enacted, Statesville will be able to bring its revenue back up to the level of a few years ago.
Missing Assumptions:
- Assuming it's feasible: does the mayor have the authority to impose legislation on companies outside its borders? Will companies comply?
- Assuming same $$ in sales & taxes: are consumers purchasing items for the same dollar amount, incurring the same tax?
- Assuming mailing addresses replicates in-person buyers: the taxes are levied on ppl with Statesville addresses. But are all the consumers who were buying in-person before actually *from* Statesville? Or were they traveling there to shop? And for Statesville residents, can they get around this buy using a different address?
- Assuming no other changes over time: the mayor concludes that the legislation will bring revenue back to the level of a few years ago. But are there any other societal changes that might hinder this? Has the economy changed?
To weaken the argument, we need a new piece of evidence that attacks one of these missing assumptions. Eliminate any answers that attack these assumptions.
(A) Because they do not need to rent or maintain physical showrooms, Internet retailers generally charge substantially lower prices for most items than do physical stores.
Yes, this attacks the assumption that we'll get comparable tax revenue. Eliminate.
(B) The vast majority of Statesville's residents have at least one trusted friend or family member who lives in one of the smaller towns surrounding Statesville and whom they would trust to receive their packages.
Yes, this attacks the assumption that we can use Statesville addresses to replicate the in-person revenue we had before.
(C) Statesville's retail stores have been consistently considered the best in the county, and consequently draw a lot of shoppers from other towns.
Yes, this attacks the idea that using Statesville addresses will mirror in-person sales. The former out of town shoppers won't be taxed under this legislation.
(D) Over the next few years, the Statesville area is likely to experience a severe recession, which could reduce consumer spending by as much as 40 percent.
Yes, this attacks the assumption that there were no other changes to the economy. With a recession, even new tax legislation likely won't bring us back to the tax revenue levels of a few years ago.
(E) Administering the proposed tax will increase the cost of doing business for Internet retailers, who will then pass the increased cost on to consumers in the form of slight markups on the price of merchandise.
This has no direct bearing on Statesville. These markups likely would be spread to all consumers, and we don't know whether it would be enough of a markup to deter online purchasing. Regardless, the tax money would be going to Statesville, increasing revenue, so this doesn't attack the mayor's plan.
The only answer choice that does not attack one of the missing assumptions is E.
Ceilidh Erickson
EdM in Mind, Brain, and Education
Harvard Graduate School of Education
EdM in Mind, Brain, and Education
Harvard Graduate School of Education
