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. I got it down to A and D

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A proposed change to federal income tax laws would eliminate deduction

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CRACKGMATNUT

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30 Aug 2021, 07:12

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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.

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30 Aug 2021, 10:19

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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.

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02 Mar 2023, 22:54

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snjainpune

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.

Quote:

The idea is that if wealthy individuals are no longer permitted to deduct donations from their taxes, then "many charitable and educational institutions would have to reduce services." This rests on the assumption that without the tax incentives, the wealthy individuals will not donate as much (choice A). As a result, those institutions would have less money and have to reduce services.

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. Thus, choice (B) can be eliminated.

Choice (D) can be eliminated for the same reason. Wealthy individuals do not have to be the ONLY individuals who make donations. Regardless, if the donations from just the wealthy individuals are reduced, the institutions would lose money and have to reduce services.

Choice (A) is the best answer.

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

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06 Apr 2023, 10:17

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(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.

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06 May 2023, 10:48

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samagra21

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snjainpune

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.

Quote:

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

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:

Quote:

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.

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!

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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

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Updated on: 20 Mar 2024, 16:16

Originally posted by stackskillz on 16 Mar 2024, 08:37.
Last edited by stackskillz on 20 Mar 2024, 16:16, edited 2 times in total.

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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.

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19 Mar 2024, 21:28

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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.

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21 Sep 2024, 11:23

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Can someone give an example of negating A?

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21 Feb 2025, 23:42

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Hi GMATNinja KarishmaB IanStewart

If the conclusion were "Therefore, many charitable and educational institutions would have to close their doors.", then options B and D would be true, right? OR still incorrect as "many" doesn't mean all?
I know this becomes a different conclusion altogether but wanted to clear my doubts on this.

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21 Feb 2025, 23:57

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agrasan

Next time you see an assumption question, I recommend you answer it first in your own words. That will make you much less tempted by other answer choices.

PS B and D are too extreme. They use the word only and that makes them immediately suspicious and often likely incorrect (not always though). This is a fairly common trap. You should build awareness for these things as you go through questions.

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21 Feb 2025, 23:59

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Pqbot101

Can someone give an example of negating A?

Negating is a weaker strategy then answering in your own words but it works if you were stuck or you cannot find an answer. However, as you can see in this example negating it is tricky as well.

Example of negating: wealthy individuals will continue providing as much money or we increase their donation amounts.

(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

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03 Oct 2025, 00:38

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Hi KarishmaB - in sentences with double negatives, do we just negate the first negative and leave the second?

KarishmaB

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.