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Senator : The average per capita after-tax income for

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Senator : The average per capita after-tax income for [#permalink] New post 28 Jan 2011, 06:06
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Senator : The average per capita after-tax income for residents of Eastbury is $30,105. 2 years ago, it was 11% lower. This can be directly attributer to the comprehensive set of tax cuts that I helped get approved in congress.

Which of the following statements, if true, most strengthens the conclusion drawn by the senator?

a) The average per capita after-tax income for the residents of Eastbury who fall below the poverty line increased by 16% in the last 5 years.
b) The senator has not personally benefited from the tax cuts.
c) The number of residents of Eastbury has not substantially changed in the last two eyars
d) The federal tax rate rose 6% during the 4 years prior to the implementation of the tax cuts.
e) A recent changes in the estate laws did not substantially increase the average per capita income before-tax income of the residents of Eastbury
[Reveal] Spoiler: OA
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Re: Average per capita income [#permalink] New post 28 Jan 2011, 09:02
praveenvino wrote:
Senator : The average per capita after-tax income for residents of Eastbury is $30,105. 2 years ago, it was 11% lower. This can be directly attributer to the comprehensive set of tax cuts that I helped get approved in congress.

Which of the following statements, if true, most strengthens the conclusion drawn by the senator?

a) The average per capita after-tax income for the residents of Eastbury who fall below the poverty line increased by 16% in the last 5 years.
b) The senator has not personally benefited from the tax cuts.
c) The number of residents of Eastbury has not substantially changed in the last two eyars
d) The federal tax rate rose 6% during the 4 years prior to the implementation of the tax cuts.
e) A recent changes in the estate laws did not substantially increase the average per capita income before-tax income of the residents of Eastbury


OA is OK. But can someone explain why it cannot be C?
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Re: Average per capita income [#permalink] New post 28 Jan 2011, 09:20
I think, it can not be C because the number of residents could have been decreased causing per-capita income to increase and weaking the senator's claim.
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Re: Average per capita income [#permalink] New post 30 Jan 2011, 07:07
praveenvino,

It cannot be C because we are talking about per capita income which is the total after tax income divided by the number of people.If the number of people change or remain the same the per capita income will get automatically adjusted. This makes C irrelevant. This is IMHO.

Hope this helps!
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Re: Average per capita income [#permalink] New post 30 Jan 2011, 22:22
By POE D or E
Choose 'D' by mistake as did not read the choice D properly
'tax rate rose 6% during the 4 years prior to the implementation of the tax cuts' --> talks about period prior to tax cuts, so D is out

It should be 'E' because -- 'recent changes in the estate laws did not substantially ' -- supports the conclusion that the increase should be because of tax cuts ... basically elimination any other cause of income increase before tax that could have led to income increase after tax.
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Re: Average per capita income [#permalink] New post 03 Feb 2011, 04:58
bascially no other change brought the result except the tax cuts.
C - makes the average per capital income variable- increasing or decreasing the taxes. Hence it can effect both ways
E - prevents pre taxed per capital income to go up. Hence that should be the assumption and stregthens the senator's conclusion
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Re: Average per capita income [#permalink] New post 06 May 2011, 13:05
+1 E

If the per capita income before taxes has not changed, this can suggest that the higher per capita incomes after taxes are result of the tax cuts.
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Re: Average per capita income [#permalink] New post 16 May 2011, 23:18
call between C and E, where
C uses a slight assumption that since number of people have decreased,the after tax salary being same,per capita income has increased. avg = Sum/number of people.

E clearly states that the Sum itself has increased,causing the average to increase too.

Hence E.
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Re: Average per capita income [#permalink] New post 17 May 2011, 07:12
c states 'The number of residents of Eastbury has not substantially changed in the last two years'

change could mean population increased ( and despite the tax cuts, this could mean the avg.per capita income may decrease, the total income remaining same)
or change could mean population decreased ( in this case avg. per capita income may increase, more with tax cuts , provided the total income of all people remained same)

hence C doesnt necessarily state the truth.
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Re: Average per capita income [#permalink] New post 01 Jan 2014, 15:42
mcmoorthy wrote:
praveenvino,

It cannot be C because we are talking about per capita income which is the total after tax income divided by the number of people.If the number of people change or remain the same the per capita income will get automatically adjusted. This makes C irrelevant. This is IMHO.

Hope this helps!


Plus we are talking about the number of residents guys, not people who are in the workforce. The argument is too broad and is not as precise as E

Hope it helps to clarify further

Cheers!
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Re: Senator : The average per capita after-tax income for [#permalink] New post 04 Oct 2015, 07:10
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Re: Senator : The average per capita after-tax income for [#permalink] New post 04 Oct 2015, 23:55
Senator : The average per capita after-tax income for residents of Eastbury is $30,105. 2 years ago, it was 11% lower.
This can be directly attributed to the comprehensive set of tax cuts that I helped get approved in congress.

Assumptions: only tax cuts are responsible for increase in per capita income and nothing else.

Which of the following statements, if true, most strengthens the conclusion drawn by the senator?

a) The average per capita after-tax income for the residents of Eastbury who fall below the poverty line increased by 16% in the last 5 years.
(this creates a paradox of why it was less 2yrs ago and increased now.)
b) The senator has not personally benefited from the tax cuts.
(OFS)
c) The number of residents of Eastbury has not substantially changed in the last two years.
(This can strengthen saying population condition remained same without affecting the percapita income but does not reveal much info.)
d) The federal tax rate rose 6% during the 4 years prior to the implementation of the tax cuts.
(what happened prior to tax cuts is not necessary.OFS)
e) A recent changes in the estate laws did not substantially increase the average per capita income before-tax income of the residents of Eastbury
(This supports our assumption that no other changes increased the income except tax cuts)
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Senator : The average per capita after-tax income for [#permalink] New post 05 Oct 2015, 10:26
Senator : The average per capita after-tax income for residents of Eastbury is $30,105. 2 years ago, it was 11% lower. This can be directly attributer to the comprehensive set of tax cuts that I helped get approved in congress.


Let Income before Tax be $ 10000
Tax be $ 1000 ( let Tax rate be 10% )
After tax Income is = $ 9900
Let there be 10 Residents , so average per capita after-tax income is $ 990 ( 9900/10)

Now comes the catch - 2 years ago, it was 11% lower , it means the After tax Income was 11% of 990 ( average per capita after-tax ) ie $ 9801.10

The Senator claims that he made comprehensive Tax cuts , so -

Lets say he reduced taxes from 15% to 10% ( tax cut by 5%) , considering other factors ( like change in income & change in population ) same the revised calculations are -

Income before Tax be $ 10000
Tax be $ 1500( earlier Tax rate is 15% )
After tax Income is = $8500
Let there be 10 Residents , so average per capita after-tax income is $ 850 ( 8500/10)

So there is an increase in Per capita Income after tax cuts.


Why E not C ?

C states - The number of residents of Eastbury has not substantially changed in the last two eyars

Substantial change can either be increase or decrease !!

1. If the population increases (Substantially ), then Per Capita after Tax Income will be less/equal/negative
2. If the population decreases (Substantially ), then Per Capita after Tax Income will be More

There are 2 possiibilities for option (C)

E states - A recent changes in the estate laws did not substantially increase the average per capita income before-tax income of the residents of Eastbury

This looks a balanced assumption, there is only one possibility -

1. Moderate increase in average per capita income before-tax - Will lead to an increase in per capita Income after Tax Cuts


Hence I stongly go for (E)
Senator : The average per capita after-tax income for   [#permalink] 05 Oct 2015, 10:26
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