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# According to the Department of Social Services, new taxes need to be

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Senior Manager
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According to the Department of Social Services, new taxes  [#permalink]

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26 Aug 2009, 12:50
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65% (hard)

Question Stats:

64% (02:08) correct 36% (02:19) wrong based on 265 sessions

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According to the Department of Social Services, new taxes need to be generated to maintain the solvency of the state's Medical Aid program, which provides medical coverage for the state's poor and uninsured residents. The governor has proposed that a special tax be imposed on those with incomes greater than \$300,000 a year to pay for the shortfalls in the Medical Aid program. While new revenues are indeed needed to maintain the Medical Aid program's solvency, the governor's plan for securing the needed funds should be rejected because it would force certain taxpayers to absorb the cost for something from which they would receive no benefit.

Which of the following, if true, would provide proponents of the governor's plan with the strongest counter to the objection that the plan is unfair?

Even with the proposed tax increase, the average tax rate on those state residents earning more than \$300,000 a year would remain lower than the tax rate on those earning this same income in neighboring states.
Any attempt to raise taxes on those with incomes greater than \$300,000 a year will cause the affluent to find creative ways to shelter their incomes and lower their taxes and thus will prove self-defeating.
Those earning more than \$300,000 a year benefit when the state directs funding to research into curing diseases such as arthritis, cancer, and heart disease, and the funding for this research is drawn from general income tax revenues to which the all taxpayers contribute.
When the poor and uninsured go without adequate medical coverage, they avoid medical treatment until their conditions become severe, forcing hospitals to raise rates for everyone so that they can treat this population.
The only alternative way of funding the Medical Aid program now being considered is through a general state income tax surcharge, which would affect affluent and middle class taxpayers alike.
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Re: According to the Department of Social Services  [#permalink]

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26 Aug 2009, 14:08
IMO D

I don't like questions with double negatives as they usually mix me up.

I believe the argument is "The governments plan to increase taxes on the wealthy is unfair as they receive no new benefit" We are asked to weaken this argument

A - Out of scope (discusses taxes in other states not the plan)
B - Strengthens the argument that it is a useless tax
C - Does not back the specific tax just taxes in general are beneficial. No new benifit will be received.
E - Strengthens the argument because it shows a viable alternative to just having the rich taxed

D - Provides a suitable (somewhat weak) defense to the argument - a small increase in taxes will benefit the rich as this will be suitable in covering the current shortfall. If no taxes the shortfall will increase as people become more sick and it will cause an increase in hospital rates.
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Re: According to the Department of Social Services  [#permalink]

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28 Aug 2009, 06:32
D seems to be correct. It is the only answer that directly links the tax-payers with the added benefits they will receive when they pay more taxes.
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Re: According to the Department of Social Services  [#permalink]

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30 Aug 2009, 17:30
This guy posted a lot of questions but never bothered to give oa for any. Very frustrating
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Re: According to the Department of Social Services  [#permalink]

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30 Aug 2009, 18:31
netcaesar wrote:
According to the Department of Social Services, new taxes need to be generated to maintain the solvency of the state's Medical Aid program, which provides medical coverage for the state's poor and uninsured residents. The governor has proposed that a special tax be imposed on those with incomes greater than \$300,000 a year to pay for the shortfalls in the Medical Aid program. While new revenues are indeed needed to maintain the Medical Aid program's solvency, the governor's plan for securing the needed funds should be rejected because it would force certain taxpayers to absorb the cost for something from which they would receive no benefit.

Which of the following, if true, would provide proponents of the governor's plan with the strongest counter to the objection that the plan is unfair?

Even with the proposed tax increase, the average tax rate on those state residents earning more than \$300,000 a year would remain lower than the tax rate on those earning this same income in neighboring states.
Any attempt to raise taxes on those with incomes greater than \$300,000 a year will cause the affluent to find creative ways to shelter their incomes and lower their taxes and thus will prove self-defeating.
Those earning more than \$300,000 a year benefit when the state directs funding to research into curing diseases such as arthritis, cancer, and heart disease, and the funding for this research is drawn from general income tax revenues to which the all taxpayers contribute.
When the poor and uninsured go without adequate medical coverage, they avoid medical treatment until their conditions become severe, forcing hospitals to raise rates for everyone so that they can treat this population.
The only alternative way of funding the Medical Aid program now being considered is through a general state income tax surcharge, which would affect affluent and middle class taxpayers alike.

I think answer is D. This is the only option which states the benefit that the high-income earners get out of the additional tax. C may or may not benefit them directly.
What's the OA? Also, what's the source?
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Re: According to the Department of Social Services  [#permalink]

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25 Jan 2014, 14:59
hogann wrote:
IMO D

I don't like questions with double negatives as they usually mix me up.

I believe the argument is "The governments plan to increase taxes on the wealthy is unfair as they receive no new benefit" We are asked to weaken this argument

A - Out of scope (discusses taxes in other states not the plan)
B - Strengthens the argument that it is a useless tax
C - Does not back the specific tax just taxes in general are beneficial. No new benifit will be received.
E - Strengthens the argument because it shows a viable alternative to just having the rich taxed

D - Provides a suitable (somewhat weak) defense to the argument - a small increase in taxes will benefit the rich as this will be suitable in covering the current shortfall. If no taxes the shortfall will increase as people become more sick and it will cause an increase in hospital rates.

But isn't the increase a detriment to everyone else equally? but if they rich DO pay, they are the only ones having to pay while everyone reaps the benefit.
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Re: According to the Department of Social Services, new taxes  [#permalink]

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25 Jan 2014, 21:20
for vc chopra.....

Real life jealousy( look --that guy is'nt paying taxes though he is reaping all benefits.....if i have to pay he too must pay) has no role in gmat logic......

actually if i have to pay taxes in all feasible arngs....... why should i protest in any one of them.......whether poor also pay or not does not save me from paying..... why bother then....my requirement is that why should i pay for something i dont benefit... but i will have to pay more under a different arrangement where in even the poor pays equally , in any case i loose...
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Re: According to the Department of Social Services, new taxes  [#permalink]

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26 Jan 2014, 16:24
Between C and D, correct answer is C

Reason :
In D, Nothing is given about how much the hospitals will raise the rates. We don't know whether the increased hospital rates will be higher/lesser than the amount paid by people above \$300,000 bracket or not.

Where C, "Those earning more than \$300,000 a year [url]benefit[/url]when the state directs funding to research into curing diseases such as arthritis, cancer, and heart disease, and the funding for this research is drawn from general income tax revenues to which the all taxpayers contribute."
C clearly states that the people who earns more than \$300,000 benefit in mentioned case.

thanks
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According to the Department of Social Services, new taxes need to be  [#permalink]

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29 Aug 2015, 12:36
4
According to the Department of Social Services, new taxes need to be generated to maintain the solvency of the state's Medical Aid program, which provides medical coverage for the state's poor and uninsured residents. The governor has proposed that a special tax be imposed on those with incomes greater than \$300,000 a year to pay for the shortfalls in the Medical Aid program. While new revenues are indeed needed to maintain the Medical Aid program's solvency, the governor's plan for securing the needed funds should be rejected because it would force certain taxpayers to absorb the cost for something from which they would receive no benefit.

Which of the following, if true, would provide proponents of the governor's plan with the strongest counter to the objection that the plan is unfair?

1. Even with the proposed tax increase, the average tax rate on those state residents earning more than \$300,000 a year would remain lower than the tax rate on those earning this same income in neighboring states.
2. Any attempt to raise taxes on those with incomes greater than \$300,000 a year will cause the affluent to find creative ways to shelter their incomes and lower their taxes and thus will prove self-defeating.
3. Those earning more than \$300,000 a year benefit when the state directs funding to research into curing diseases such as arthritis, cancer, and heart disease, and the funding for this research is drawn from general income tax revenues to which the all taxpayers contribute.
4. When the poor and uninsured go without adequate medical coverage, they avoid medical treatment until their conditions become severe, forcing hospitals to raise rates for everyone so that they can treat this population.
5. The only alternative way of funding the Medical Aid program now being considered is through a general state income tax surcharge, which would affect affluent and middle class taxpayers alike.
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Re: According to the Department of Social Services, new taxes need to be  [#permalink]

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29 Aug 2015, 12:41
souvik101990 Harley1980 mikemcgarry

Any suggestion how can we eliminate b/w C & D?
Towards the end of the test especially after 30 verbal questions when the brain is mostly relying on pattern matching, I fell for option C.
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Re: According to the Department of Social Services, new taxes need to be  [#permalink]

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29 Aug 2015, 13:30
NickHalden wrote:
souvik101990 Harley1980 mikemcgarry

Any suggestion how can we eliminate b/w C & D?
Towards the end of the test especially after 30 verbal questions when the brain is mostly relying on pattern matching, I fell for option C.

C says "to which the all taxpayers contribute".
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According to the Department of Social Services, new taxes need to be  [#permalink]

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30 Aug 2015, 00:31
NickHalden wrote:
souvik101990 Harley1980 mikemcgarry

Any suggestion how can we eliminate b/w C & D?
Towards the end of the test especially after 30 verbal questions when the brain is mostly relying on pattern matching, I fell for option C.

Hello NickHalden

The conclusion of argument is that plan is bad because some people (those with 300000 income) will pay for curing other people.

C says that people with 300000 received some benefits from specific medical research. But this does not influence conclusion because these people are still pay for curing other people.

D says that we already have this situation when some people (those who will go to hospital) pay for curing other people so conclusion is wrong because main problem of the plan already present.
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Re: According to the Department of Social Services, new taxes need to be  [#permalink]

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31 Aug 2015, 00:58
pls look at this thread. Topic has been discussed before:

according-to-the-department-of-social-services-new-taxes-151811.html
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Re: According to the Department of Social Services, new taxes need to be  [#permalink]

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16 Jul 2017, 09:50
Merged topics. Please, search before posting questions!
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Re: According to the Department of Social Services, new taxes need to be  [#permalink]

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05 Nov 2017, 01:32
Even with the proposed tax increase, the average tax rate on those state residents earning more than \$300,000 a year would remain lower than the tax rate on those earning this same income in neighboring state

why this can not be accepted as logic . It seems fair enough.

Thanks
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Re: According to the Department of Social Services, new taxes need to be  [#permalink]

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05 Nov 2017, 10:50
According to the Department of Social Services, new taxes need to be generated to maintain the solvency of the state's Medical Aid program, which provides medical coverage for the state's poor and uninsured residents. The governor has proposed that a special tax be imposed on those with incomes greater than \$300,000 a year to pay for the shortfalls in the Medical Aid program. While new revenues are indeed needed to maintain the Medical Aid program's solvency, the governor's plan for securing the needed funds should be rejected because it would force certain taxpayers to absorb the cost for something from which they would receive no benefit.

Which of the following, if true, would provide proponents of the governor's plan with the strongest counter to the objection that the plan is unfair?

A. Even with the proposed tax increase, the average tax rate on those state residents earning more than \$300,000 a year would remain lower than the tax rate on those earning this same income in neighboring states. -We are not worried about the taxes in neighbouring states
B. Any attempt to raise taxes on those with incomes greater than \$300,000 a year will cause the affluent to find creative ways to shelter their incomes and lower their taxes and thus will prove self-defeating. -If the people find different ways to shelter their income then the new tax won't have any benefits
C. Those earning more than \$300,000 a year benefit when the state directs funding to research into curing diseases such as arthritis, cancer, and heart disease, and the funding for this research is drawn from general income tax revenues to which the all taxpayers contribute. -We are not talking about the research but about the poor and needy
D. When the poor and uninsured go without adequate medical coverage, they avoid medical treatment until their conditions become severe, forcing hospitals to raise rates for everyone so that they can treat this population. -Correct. If a certain category of people don't pat surcharge then the increased prices will impact every section of the economy.
E. The only alternative way of funding the Medical Aid program now being considered is through a general state income tax surcharge, which would affect affluent and middle class taxpayers alike. -We are not interested in the alternative ways
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Re: According to the Department of Social Services, new taxes need to be &nbs [#permalink] 05 Nov 2017, 10:50
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