A proposed change to federal income tax laws would eliminate deduction

(B) Money contributed by individuals who make their donations because of provisions in the federal tax laws provides the only source of funding for many charitable and educational institutions.

Let's say that many charitable and educational institutes receive $50 from these donating individuals and $50 from government. If these individuals stop giving their $50, there is still a chance that government may increase their share to $100. Therefore, there will be no effect on the institutes. However, this is not true.
So, option (B) is correct.

Good question. Let's start by considering what it means to be an assumption of an argument. Basically, an assumption is something that is necessary for an argument to hold. Put another way, if the assumption were not true, the argument should fall apart.

Here's (B) again:

Would the argument fall apart if this weren't true? Not exactly.

Notice that we don't need to assume that the money contributed by these individuals provides the ONLY source of funding for "many charitable and educational institutions." In other words, even if there were other sources of funding (such as the government, for instance), losing donations from wealthy individuals could still have a big impact on charitable institutions.

From another angle: for this argument to work, we'd probably need to assume that the donations from wealthy individuals make up a significant chunk of the money donated to charitable institutions. But we don't need to assume that the individuals mentioned in (B) are the only source of funding. For that reason, we don't need to assume (B) for the argument to hold, which makes it incorrect.

I hope that helps!

A proposed change to federal income tax laws would eliminate deductions from taxable income for donations a taxpayer has made to charitable and educational institutions. If this change were adopted, wealthy individuals would no longer be permitted such deductions. Therefore, many charitable and educational institutions would have to reduce services, and some would have to close their doors.

Understanding the argument -
A proposed change would eliminate deductions from taxable income.
If this change were adopted, wealthy individuals would no longer be permitted such deductions. (Do not jump to say that this means wealthy individuals do not contribute - that is an assumption that is not stated. What is stated is that they are not permitted. The assumption is if someone is not permitted, they don't do it in light of the conclusion here)
Conclusion - many charitable and educational institutions would have to reduce services, and some would have to close their doors.

The assumption is NOT - Wealthy individuals contribute to the majority of donations.
The assumption for the conclusion is that wealthy individuals DO NOT contribute to the majority of donations in light of the proposed change. (Not the ONLY one)

The argument above assumes which of the following?

(A) Without incentives offered by federal income tax laws, at least some wealthy individuals would not donate as much money to charitable and educational institutions as they otherwise would have. - Complex options have unnecessarily complicated a simple question. What it is necessarily trying to say is that "at least some wealthy individuals would not donate." in line with our pre-thinking.
It's further complicated by the way we negate options (GMAT knows it, and they just want to raise the bar higher)
The correct negation of "at least some wealthy individuals would not donate" is "None wealthy individuals would not donate," which essentially means "all will donate."
Or the Correct negation of "at least some wealthy individuals would not donate" is "at least some wealthy individuals would donate," which essentially means "at least some will still donate."
In both cases, the conclusion breaks because if all or some are still donating, then "many charitable and educational institutions would not have to reduce services, and some would not have to close their doors."

Incorrect negation - "at least some wealthy individuals would not donate" is "none would donate." This is where this gets complicated as GMAT knows we try to negate every option (which is not a good practice. We should negate the final left or between the final 2 to decide), and this is a trap set by GMAT.

(B) Money contributed by individuals who make their donations because of provisions in the federal tax laws provides the only source of funding for many charitable and educational institutions. - ONLY source is a problem. We don't need to assume that it's the only source.

(C) The primary reason for not adopting the proposed change in the federal income tax laws cited above is to protect wealthy individuals from having to pay higher taxes. Out of scope.

(D) Wealthy individuals who donate money to charitable and educational institutions are the only individuals who donate money to such institutions. - ONLY individuals is a problem. We don't need to assume that these individuals are the only source.

(E) Income tax laws should be changed to make donations to charitable and educational institutions the only permissible deductions from taxable income. Out of scope

Conc: Therefore, many charitable and educational institutions would have to reduce services, and some would have to close their doors.

(A) Without incentives offered by federal income tax laws, at least some wealthy individuals would not donate as much money to charitable and educational institutions as they otherwise would have. - Answers the question - Would wealthy individuals continue to donate as much money? It is possible that if people stopped donating, it could have the adverse effects on charity as stated in the passage. This seems like a possible answer. Let's negate to check - "Even without the incentives, wealthy individuals contineu to donate as much money as before". If this is the case, then the conclusion doesn't stand. The answer doens't hit you like a brick bat, but with some work, it looks solid. Keep

(B) Money contributed by individuals who make their donations because of provisions in the federal tax laws provides the only source of funding for many charitable and educational institutions. - Answers the question - "What are the sources for donations?" So, it does look like if the provision is removed it'll remove the funding. Let's negate to check. "Money contributed by individuals who make their donations because of tax-relief is not the only source of funding for many charitable and educational institutions. However, eliminating the tax relief will  reduce the overall money donated to charities. Therefore, many charitable and educational institutions would have to reduce services, and some would have to close their doors." Sounds plausible, doesn't it? Drop

(C) The primary reason for not adopting the proposed change in the federal income tax laws cited above is to protect wealthy individuals from having to pay higher taxes - Talks about a different scenario, where the change is not adopted. Not relevant to the conclusion. Drop

(D) Wealthy individuals who donate money to charitable and educational institutions are the only individuals who donate money to such institutions. - Firstly, the option talks about "Wealthy are the only individuals who donate money to the institution." Does that mean, organizations also donate money? Secondly, and more importantly, this option is similar to option B, it talks about possible sources of charity. Even if they're not the sole source of donations, the reduction in donation due to provision would still be in line with the conclusion. Drop

(E) Income tax laws should be changed to make donations to charitable and educational institutions the only permissible deductions from taxable income - States an alternate conclusion. No need to think much. Drop. ­

A) Without incentives offered by federal income tax laws, at least some wealthy individuals would not donate as much money to charitable and educational institutions as they otherwise would have.

   - This assumption is necessary for the argument because it supports the conclusion that many charitable and educational institutions would suffer if tax deductions for donations from wealthy individuals were eliminated. If wealthy individuals are less motivated to donate without tax incentives, it would likely result in reduced funding for these institutions, as asserted in the argument. Therefore, this assumption strengthens the argument's conclusion about the potential impact of the proposed change in tax laws.

B) Money contributed by individuals who make their donations because of provisions in the federal tax laws provides the only source of funding for many charitable and educational institutions.

   - This assumption goes beyond the scope of the argument. The argument focuses on the potential impact of eliminating tax deductions on donations from wealthy individuals, but it does not claim that these donations are the sole source of funding for charitable and educational institutions.

C) The primary reason for not adopting the proposed change in the federal income tax laws cited above is to protect wealthy individuals from having to pay higher taxes.

   - This assumption introduces a new reason for opposing the proposed change in tax laws, which is not directly related to the argument's conclusion about the potential consequences for charitable and educational institutions. Therefore, this assumption is not required by the argument.

D) Wealthy individuals who donate money to charitable and educational institutions are the only individuals who donate money to such institutions.

   - This assumption is too extreme and goes against common knowledge. While wealthy individuals may contribute significant amounts to charitable and educational institutions, they are not the only donors. Many individuals from various income levels donate to such institutions for various reasons. Therefore, this assumption is not necessary for the argument.

E) Income tax laws should be changed to make donations to charitable and educational institutions the only permissible deductions from taxable income.

   - This assumption goes beyond the scope of the argument and proposes a specific policy change that is not explicitly advocated for in the argument. The argument does not address whether donations to charitable and educational institutions should be the only permissible deductions. Therefore, this assumption is not required by the argument.

Can someone give an example of negating A?