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29 Sep 2025, 21:10
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Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
35%
(medium)
Question Stats:
69% (01:39) correct
31%
(01:56)
wrong
based on 237
sessions
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According to some people, income tax should be done away with in the US since there are several other ways to collect taxes. A few countries in Europe have successfully abolished income taxes by raising other taxes such as sales tax. Of course this makes products more expensive but with the added amount of money you would receive on your paycheck, you will still be better off than you were paying income taxes.
Which of the following, if true, provides the most support for the argument above?
(A) The prices of products in European countries, when converted into US dollars at current rates are very similar to their prices in the United States.
(B) The increase in prices of products because of the increased sales tax rate will not more than offset the benefit of not paying any income taxes.
(C) The legislative body in the United States has stated that it will support the move to abolish income tax.
(D) Apart from increasing sales tax, the government can also increase other special taxes such as those on petroleum products.
(E) The government has enough funds in reserve currently to be able to absorb any shock because of lowered tax collection.
Which of the following, if true, provides the most support for the argument above?
(A) The prices of products in European countries, when converted into US dollars at current rates are very similar to their prices in the United States.
(B) The increase in prices of products because of the increased sales tax rate will not more than offset the benefit of not paying any income taxes.
(C) The legislative body in the United States has stated that it will support the move to abolish income tax.
(D) Apart from increasing sales tax, the government can also increase other special taxes such as those on petroleum products.
(E) The government has enough funds in reserve currently to be able to absorb any shock because of lowered tax collection.
29 Sep 2025, 21:47
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Explanation: The argument’s key claim is that replacing income tax with higher consumption taxes will leave people better off because the extra take-home pay will exceed the extra cost of higher prices. Choice B directly confirms that the price increase from higher sales tax will not outweigh the benefit of not paying income tax, which most strongly supports the conclusion.
Other options:
A is irrelevant—similar absolute prices in Europe don’t show net benefit after tax changes.
Answer: B
C and E are about political feasibility or government reserves, not about whether individuals are better off.
D merely lists other tax sources the government could use; it doesn’t show that consumers would end up better off.
Other options:
A is irrelevant—similar absolute prices in Europe don’t show net benefit after tax changes.
Answer: B
C and E are about political feasibility or government reserves, not about whether individuals are better off.
D merely lists other tax sources the government could use; it doesn’t show that consumers would end up better off.
29 Sep 2025, 22:17
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Bunuel
Let us first break down the argument.
According to some people, income tax should be done away with in the US since there are several other ways to collect taxes. A few countries in Europe have successfully abolished income taxes by raising other taxes such as sales tax. Of course this makes products more expensive but with the added amount of money you would receive on your paycheck, you will still be better off than you were paying income taxes.
Premise 1 - There are several other ways to collect taxes (besides income tax).
Premise 2 (supports premise 1) - A few countries in Europe have successfully abolished income taxes by raising other taxes such as sales tax.
Premise 3 - With the added amount of money you would receive on your paycheck, you will still be better off than you were paying income taxes.
Conclusion - Income tax should be done away with in the US.
Premise 1 and 3 support the conclusion while premise 2 justifies premise 1. Any thoughts or disagreements on this? The argument can therefore rewritten as:
A few countries in Europe have successfully abolished income taxes by raising other taxes such as sales tax. So, there are several ways to collect taxes. Also, with the added amount of money you would receive on your paycheck, you will still be better off than you were paying income taxes. Therefore, income tax should be done away with in the US (according to some people).
Remember, we are to strengthen the argument, that is, we need one more reason that proves income tax should be done away with in the US.
Let us now go through the answer choices:
(A) The prices of products in European countries, when converted into US dollars at current rates are very similar to their prices in the United States. - So what? That does not mean income tax should be abolished in the US! - ELIMINATE
(B) The increase in prices of products because of the increased sales tax rate will not more than offset the benefit of not paying any income taxes. - Typical GMAT gobbledygook. Let us only eliminate the options that we are sure can be eliminated. - HOLD
(C) The legislative body in the United States has stated that it will support the move to abolish income tax. - Just because the body has stated does not mean it should be abolished. - ELIMINATE?
(D) Apart from increasing sales tax, the government can also increase other special taxes such as those on petroleum products. - Really not worried about this! - ELIMINATE
(E) The government has enough funds in reserve currently to be able to absorb any shock because of lowered tax collection. - Alright! But does that mean income tax should be abolished? Why? How? - ELIMINATE
Answer is (B). When you now look at (B), you understand that it gives us a reason in support of the conclusion. It says that the price rise that can happen by reason of increasing other taxes will not more than offset, meaning, will not completely or fully cancel out the benefit of not paying any income taxes. Meaning, the public will still benefit. And therefore, the claim made by some people that income tax should be abolished is justified.
Let me know if you have any questions or disagreements!
B Sudharsan
Founder of the Literary Zeitgeist
