A proposed change to federal income tax laws would eliminate deduction

[quote="omega17"]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.

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.

(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.

(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.

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

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

Official Explanation from GMAC:

Answer Explanation

Reasoning What must be true in order for the given information to justify the conclusion that the proposed change in tax laws would force charities and schools to reduce services or close down? The passage states only one premise: that the change would deny wealthy individuals tax deductions for contributing to charities and schools. To reach the conclusion from this premise, the argument implicitly assumes that denying the wealthy individuals the tax deductions would reduce their contributions to many charities and schools; that reduced contributions from wealthy individuals would reduce overall revenues for many charities and schools; and that reduced revenues would force many charities and schools to reduce services or close down. Consider the answer options and find one that states or follows from one of these assumptions.

A Correct. This follows from the first implicit assumption mentioned above, that denying wealthy individuals the tax deductions would reduce their contributions to many charities and schools.
B This need not be true. Even if all charities and schools get some money from sources other than these contributions, many charities and schools might still depend mainly on the contributions.
C The argument does not address the motives behind the proposed change, only its likely effects.
D Even if poorer individuals also donate money to these institutions, the bulk of the donations may come from wealthy individuals.
E The argument does not discuss how the tax laws should be changed, only the likely effects of the proposed change.

Hi VeritasKarishma and GMATNinja

Could you please help me understand why D is wrong?
When I negated the option D i.e. "Wealthy individuals who donate money to charitable and educational institutions NOT are the only individuals who donate money to such institutions. "
This breaks the conclusion.

However, option A on negation becomes
"Without incentives offered by federal income tax laws, at least some wealthy individuals WOULD donate as much money to charitable and educational institutions as they otherwise would have."
This does not break my conclusion.

I have discussed this here:
https://gmatclub.com/forum/a-proposed-c ... l#p2252867

Note that the argument doesn't say that all donations will stop. It just implies that donations will get affected (leading to reduced services or closing doors). Hence wealthy individuals NEED NOT be the ONLY contributors.

Also negation of "some" is "none".

(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.

Negated (A): Without incentives offered by federal income tax laws, none of the wealthy individuals would not donate as much money to charitable and educational institutions as they otherwise would have.
that is the same as saying "without incentives, all wealthy individuals will donate as much money as they otherwise would."

We have assumed that without incentives, donations WILL get affected. We have assumed that some wealthy individuals will not give as much as before. That is why we have concluded that services will be reduced or some may shut down.

Check this post on negation: https://www.gmatclub.com/forum/veritas-prep-resource-links-no-longer-available-399979.html#/2016/0 ... ions-gmat/
_________________

The argument is that many charitable and education institutions would need to reduce services, and some would have to close their doors.

Why? (what evidence have we got to support this?)


The gap here is that wealthy individuals donate because of these incentives.

A nails this gap completely - the best thing to do is to substitute A into the argument as a premise:


A works perfectly as the argument logically follows from the premises.

B this may be true, but either way it doesn't really help resolve the gap between the premise about wealthy individuals and the conclusion. Besides. This answer choice still relies on us to over-deduce the assumption that individuals only donate because they get a tax-write off

C is completely against what is stated in the argument.

D - This is quite possibly the case, but this doesn't help resolve why the proposed legislation would see the closure of the institutions. It doesn't explain WHY the donations will stop, but it just explains the SOURCE itself.

E - this is completely irrelevant to the argument made, so how can it be assumed

Premise: if tax deductions from donations are eliminated, wealthy people will not donate
Conclusion: charities would have to reduce services or close down

(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.
-- negation: even without incentives, some wealthy people WOULD donate as much money as before
Directly contradicts the premise and the conclusion, so this is a good choice as the original version strengthens.

(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.
-- negation: money contributed due to tax laws does NOT provide the only source of funding, this seems to weaken somewhat, but there are other problems. Is it necessary to reach the conclusion? No, because we need to specifically address wealthy donors, not individuals, and because it doesn't state whether or not people would donate regardless of the changes, just that currently it is the way these organizations earn money. So the original doesn't actually help reach the conclusion.

(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 to argument

(D) Wealthy individuals who donate money to charitable and educational institutions are the only individuals who donate money to such institutions.
-- negation: wealthy people are NOT the only ones who donate; actually weakens but the original doesn't strengthen.
-- Even if they are the only people, it doesn't help us conclude that they won't donate after the change, same issue as in B)

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

As @GMATNinha correctly pointed out, B and D are a bit tempting, but are incorrect because they do not have to be THE ONLY sources of funding.

One can apply the conditional reasoning to answer the question.

The prompt says "no incentives -> no donation". Search for the answer choice that repeats the same pattern.
Option A says that "without incentive there will be not as much donation" which essentially means "no incentives -> no donation".

Hope that helps.

Mistakenly chose B and then I realized it later:

Lets take some nos. here- Suppose there are 100 NGOs (charitable & educational institutes). B says Many will 'reduce services' & Some will 'close'. In terms of nos., lets say 60 (Many>50) will 'reduce services' & 10/20 (Some<50) will 'close'.

What B says is: Many- i.e. For 60 NGOs, this is the only source of money. In that case, these 60 should close shop, however, only 'Some' (10/20) will 'close' it as per the argument and rest are only severely impacted. Hence, B is NOT true.

[/quote]

GMATNinja,
I love the way you explained negation to eliminate option B and D.
I tried the same for option A and below doubt occurred to me.
" 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. "
Now suppose there were 100 individual and as per option A, 10 individual (at least some) donated the as much money, still "many charitable and institutions would have to reduce services, and some would have to close their doors."

at least some- This underlined part doesn't allowing me accept A as answer.
PS VeritasKarishma - I read your negation technique also, but I have doubt which step I did wrong ?

Both please explain.

This is the reason I am not a fan of negation technique. Test takers feel it is a mechanical way out and helps one not to think - but that is not true. It often leads to way more confusion.

Did you check my previous explanation on this?
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.


In simple terms, we are assuming that if donations are made non deductible, some people (perhaps even just 10 out of 100) will stop/reduce donations. Since we are concluding that there will be negative impact on making donations non deductible, we are assuming that some people will be demotivated to donate. That is all option (A) says.

(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.

Without incentives, at least some people will n to donate as much as before.

Now if you insist on negating, note what is negation of "some". It is "none"

Stmnt - Some people are A.
Negation - No people are A.

Stmnt - Without A, at least some B will not donate as much.
Negation - Without A, no B will not donate as much.

So negation of (A) is
Without incentives, none of the individuals would not donate as much money to charitable and educational institutions as they otherwise would have.
This means all will donate as much.
(Note the double negative - "no one will not donate as much as before" becomes "all will donate as much as before" )

If all will donate as much as before, then we should have no negative impact and our conclusion falls apart.

Hence (A) is an assumption.
_________________

I am wondering how do you negate choices with multiple negatives?

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.

What would be the correct negation of a choice like this? Do we focus solely on the sample space?

Without incentives offered by federal income tax laws, NO wealthy individuals would not donate as much...?
_________________

This part - "In order to draw the conclusion, wealthy individuals do not have to be the ONLY source of funding for those institutions. Even if donations from wealth individuals account for, say, half of the funding, if those donations are significantly reduced, the institutions would lose a lot of money."

This part can be deduced from the connecting line that is provided in between the explanation & the conclusion. It is certainly a confusing one but that line is there for a purpose. Which is to highlight the role of tax deductions rather than closing of some services.

Posted from my mobile device

Hi EducationAisle

Can help negating option A?

(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

Will it be 1 or 2 or combination of 1 and 2?

1) Without the incentives offered by federal income tax laws, NO
wealthy individuals would not donate as much money to charitable and
educational institutions as they otherwise would have

2) Without the incentives offered by federal income tax laws, at least some
wealthy individuals would donate as much money to charitable and
educational institutions as they otherwise would have

Both) Without the incentives offered by federal income tax laws, NO
wealthy individuals would donate as much money to charitable and
educational institutions as they otherwise would have.

Just (1)...right?

Basically the negation is:

1) (Even) without the incentives offered by federal income tax laws, there are no wealthy individuals (who) would not donate as much money to charitable and educational institutions as they otherwise would have

In other words, incentives or no incentives, wealthy individuals would continue to donate money to charitable and educational institutions.

If that's the case, nothing changes: charitable and educational institutions would not have to reduce services, and no institutions would have to close their doors.

So, the conclusion is invalidated, by negating option A.
_________________

(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 can be the case since then some of the charities might close because they don't recieve the requisite funds to stay afloat

(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.
It might not be an only source this is a oversimplification therefore out

(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.
The change is just suggested we don't know whether it's implemented or not therefore out


(D) Wealthy individuals who donate money to charitable and educational institutions are the only individuals who donate money to such institutions.
The only is excluded would have made the option strong contender we cannot be absolutely sure whether the wealthly individuals were the sole contributors therefore out

(E) Income tax laws should be changed to make donations to charitable and educational institutions the only permissible deductions from taxable income.
This supporting in not an assumption option therefore out

Therefore IMO A

Negation of some is nothing (0). So negation of A says , 0 will not donate money i.e. all will donate money ,this shatters the conclusion ,so OA is A.

I have observed we can rarely find a video solution to Verbal questions. If someone knows any channel that does that pls let me know.

This question is a brilliant play on preciseness - especially of words like "some" and "many".

In option B, "individuals" covers wealthy individuals as well, right? So, shouldn't this be an assumption?