A proposed change to federal income tax laws would eliminate deduction

My answer is A.
It is relatively easy to eliminate all the others except A and D.

It's not D because you don't need to assume that ONLY wealthy individuals donate to charities. It is safe to assume that "some" wealthy individuals donate to charities. If those stop donating then some charities would have to reduce their service or even close their doors if they depend too much on wealthy individuals.

Simply put, D is too safe an assumption.

Many charitable and educational institutions would be forced to reduce services and even shutdown only when they do not have enough money.
According to the passage, these institutions will close if the proposed change takes effect which means the only source of their finance should be the "money contributed by individuals who make their donations because of provisions in the federal tax laws". The conclusion is based on this assumption. So, the answer is B.

Any more takers why B is incorrect?
Could it have been the answer if in the stimulus it were given that the charitable institutions and educational institutions would have to "close their doors" rather than "reduce their services, and some would have to close their doors"?
Is "reduce their services" implying that the institutions are still getting some money, though in small amount from others?

Hi Marcab,

The key word is as has been pointed out 'only'.

In your example I don't think B would be good either. Even if it was that the charities had to stop functioning, that doesn't mean that the tax relief donors were the only ones. For example if they had made up 99% of the donations, and that were to be taken away the charities would probably still have to stop functioning, yet the 1% of other donors would mean that the tax relief donors were not the 'only' donors.

Hope that helps.

james

this seems to be a tricky one..even i went for D

in my opinion d only explanation i could find for A being the answer is..

As the conclusion says:Therefore, many charitable and educational 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.

That means if Wealthy individuals are the only people doing charity.. then all institutions will have to shut down.

But as the conclusion says only some institutions will close down.

I tried use negation rule on A..
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.

i.e even if there are no incentives provided by govt. wealthy people will do charity.Thus it means that the institutions will not have to shut down.This goes against the conclusion.

The thing is, if we use negation rule on D ,the conclusion is not weakened.. I guess soniedarshan might also made the same mistake. but he has edited the OA, i guess. And I think people might have seen questions posted by soniedarshan that have OA as D. I checked all his questions on other forums and they are all fine. People should stop making such conclusions without any evidence.

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!

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

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.

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.

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.