A proposed change to federal income tax laws would eliminate deduction

MODIFIED ELEMENTS OF ARGUMENT ARE AS FOLLOWS-----

CONCLUSION- Many charitable and institutions would have to reduce services, and some would have to close their doors.
PREMISE-1. A proposed change to federal income tax laws would MAKE DONATIONS TAXABLE....

PREMISE-2. Wealthy individuals WILL HAVE TO PAY TAXES...

GUESS ON ASSUMPTION----
1. SOME WEALTHY INDIVIDUALS MAY NOT DONATE IF DONATIONS ARE NOT TAXABLE.....
2. DONATIONS BY WEALTHY INDIVIDUALS DOES MATTER WHEN PROVIDING SERVICES ....


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. CORRECT

(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.... EXTREME....... INCORRECT....

(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. INCORRECT

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

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

why not D ???
the conclusion says : Therefore, many charitable and institutions would have to reduce services, and some would have to close their doors.

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

if you negate D you will get " wealthy people are not the only one who pay to charities , so there are other people who donate ,,, this means that the charities will not close because they have another source. (the conclusion weakened)

CLEARLY " A"......
"D" IS EXTREME AND NEED NOT BE TRUE TO THE EXTENT GIVEN..... EVEN A MODERATE VERSION IS OK.... IN OTHER WORDS "IT'S A OVER KILL".......


hope it helps......

Proposed - Eliminate deductions from Taxable income if taxpayers make to charitable and educational institutions.

If adopted - Wealthy Individuals would no longer be permitted such deductions.

Conclusion - charitable and educational institutions would have to close their services.

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.

True why would Wealthy Individuals like to donate to charitable and educational institutions ?

(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.

Over emphasis , hence not true.

(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.

Irrelevant and out of scope.

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

The passage doesn't mention that wealthy people are the only contributors.

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

Mentions a proposed course of action , this can not be an assumption.


Hence IMO (A) looks the best..
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Options B and D are too extreme assumptions because of the word 'only'.The conclusion is MANY would reduce services while only SOME would shut shop.That implies the rich are not the ONLY source.

If we look at the last two line of the argument

"If this change were adopted, wealthy individuals would no longer be permitted such deductions. Therefore, many charitable and institutions would have to reduce services, and some would have to close their doors. "

We can that there is a disconnect between the two. Wealthy individuals would not be permitted such deductions but how will that impact the money flow to the charitable institutions and that's where (A) comes in. Hence A is the correct answer

My answers bellow:

Got it right by elimination.

(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 otherwis would have. CORRECT: it it not clear that ALL institutions would close. The TONE is not EXTREME in this answer choice

(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. THE ONLY source is a very extreme assumption

(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. how can this be assumed, we have no info about it. WRONG

(E) Income tax laws should be changed to make donations to charitable and educational institutions the only permissible deductions from taxable income. Again, out of scope. doesn't help.

A as it is the most conservative answer choice out of all of them. Good strategy to use in these situations. Those considering B or D, realize that for these assumption questions 'only' 'all' type wording usually takes it too far

Hello Experts,

Could you please explain why A is correct & B and D are wrong, even though all shatter the conclusion on negating them?

Thanks.

Please explain the negation of Option A

Sent from my SM-A510F using GMAT Club Forum mobile app

Hi

(A) Without the 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.

The negation of the option A is:
Thinking logically, if there are some wealthy persons who would donate less money
Then if this negated, it means, no wealthy persons would donate less money OR All wealthy individual would donate the same amount of money.
So now the conclusion breaks as if the above negation happens charitable institutions wont suffer from funds.

Hope this helps
Regards
S

Hiii Experts Please provide POE for B and D. I am not able to understand from previous expalnations

I don't have much to add on top of what was written in this post...

B and D would certainly strengthen the argument, but this is not a strengthen question. We are looking for an assumption made by the argument. Wealthy individuals might be only source of funding for those institutions, but the argument could still hold even if this were not true.

For example, maybe wealthy individuals are the primary source of funding, and the institutions receive some funding from other sources. The institutions would still obviously have a serious financial problem if the wealthy individuals were to stop donating. (D) can be eliminated for the same reason.

Without (A), the argument falls apart, so it is the best answer. I hope that helps. If not, please be as specific as possible with your follow-up questions. Thanks!
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Arguments conclusion is: "Therefore, many charitable and educational institutions would have to reduce services"

The argument is simplified into this: If federal income tax law changes, no tax deduction for education donations. Wealthy people donate to education institutions. [MISSING PREMISE] If law changes, schools services reduced, because of lack of donations.

The only answer that logically fits before the conclusion, is choice (A); because a rich person may still donate regardless of a tax incentive. They may donate for prestige or glory reasons. It has to be A because that choice is directly linked to the argument's conclusion insofar are it focuses on the the subject "wealthy individuals" and "educational institutions".

Answer is A

Premise:
1. unlike before, Basically charitable income will be taxable now - proposal only.
2. If this change were adopted, wealthy individuals would no longer be permitted such deductions.
3. Conclusion - Therefore, many charitable and educational institutions would have to reduce services, and some would have to close their doors.

pre-thinking:
-- Many institute depends on the charitable given by wealthy.

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. --- So before this law, if these individuals used to give $1000, after law they will give may be $500.these kind of situation with lot many people. and financially it will impact these places. Lets negate --- these guys will still give same amount, then why these institute will close ? lets keep A

(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. --- well, institutes depends heavily, but not exclusively

(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. ---- something we dont know.

(D) Wealthy individuals who donate money to charitable and educational institutions are the only individuals who donate money to such institutions. -- too extreme language.

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

Are B and D wrong because the argument says that "many" charitable and educational institutions would have to reduce services, and "some" would have to close their doors.

If B and D were correct, then instead of "many" and "some", it would be "all".

Can an expert confirm?

VeritasKarishma

Confused between A, B, and D.

If I negate B
Money contributed by individuals who make their donations because of provisions in the federal tax laws provides "are not the only" source of funding for many charitable and educational institutions.

Then negation of B shows that there are other sources. Doesn't this break the conclusion that many charitable and educational institutions would have to reduce services, and some would have to close their doors?

If I negate D
Wealthy individuals who donate money to charitable and educational institutions are NOT the only individuals who donate money to such institutions.

again the same reasoning as B, it breaks the conclusion.

Same with the negation of A.

All three when negated seem like breaking the conclusion. What am I doing wrong??

My thinking: People who donate money to charity, do it with the purpose of saving taxes.

Please explain why B and D are wrong?? And why A is right?

Please explain using the negation technique.

Conclusion :- Many charitable and educational institutions would have to reduce services and some would have to close their doors.
Premise :- Wealthy individuals wont be allowed deductions from taxable income for making donations to charitable and educational institutions.

Only A and B and D are close.
If you negate B , it becomes " Money contributed by individuals does not provide the only source of funding for institutions." There are other sources of funding too. But we do not know how these "other sources" are going to react. They may not make donations as those "individuals" did .
So the conclusion that says " many institutions would have to reduce services and some would have to close the doors" may follow.
Conclusion follows after negating the statement B. So it can not be the assumption.

If you negate option D it becomes "Wealthy individuals are not the only individuals who donate money". There are other individuals too. But We do not know how these "other individuals" are going to react. So the conclusion may follow and hence the option D also becomes incorrect.

For option A , after negation it becomes "At least some individuals would donate as much money to charitable institutions as they otherwise would have..". Then the conclusion that says "Some institutions would have to reduce services and some close their doors" can not follow. Because the "money" problem will be resolved somewhat.
Conclusion can not follow after negating the statement A.
So, A is the assumption.

GMATNinja, GMATNinjaTwo, gmat1393, nightblade354 , VeritasKarishma -- Please let me know your comments on my explanation.
mallya12 did you find my explanation helpful ?

Look at the structure of the argument:

- A proposed change would eliminate deductions from taxable income for donations.
(the donations one makes to charity are usually deducted from taxable income i.e. one doesn't need to pay tax on them. Eliminating deductions means one would need to pay tax on charity donations too)

- If this change were adopted, wealthy individuals would no longer be permitted such deductions.
(wealthy individuals would have to pay tax on donations too)

Conclusion: Many charitable and educational institutions would have to reduce services, and some would have to close their doors.

This is a big jump from eliminating deductions to charitable instis closing down their doors.

There are a few assumptions here:
1. If donations are made non deductible, some wealthy people will reduce/stop donating.
2. If wealthy people reduce/stop donating, charitable instis will not be able to manage the current services.

Mind you, there is NO assumption that no one else donates (e.g. the Govt) and that these individuals are the only source of funding. The assumption is that wealthy people not donating will have an impact. So options (B) and (D) are incorrect.

Option (A) corresponds to assumption 1 above and is the answer.
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