Critical Reasoning

Source: Knewton

A major city uses income from tax revenues to fund incentives for high-end retailers from out of town to open stores in its new downtown shopping district. Although city taxes on such stores will generate tax revenues greater than the cost of the incentives, this practice is unwise. Locally based high-end retailers would open stores in the new shopping district without requiring the city to spend tax revenue on incentives.

Which of the following, if true, most strongly supports the city's policy of offering cash incentives to out-of-town retailers?

A: Some retailers already headquartered in the city sell similar brands at similar prices to those of high-end retailers from out of town.
B: The city's tax revenues have been steadily declining for the past decade.
C: A longstanding city law exempts locally-based businesses from having to pay city taxes.
D: The practice of cities offering cash incentives to retailers began less than a decade ago.
E: Unlike retailers headquartered in the city, the high-end retailers offered cash incentives have hundreds of stores across the country