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# CR: explain paradox

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Senior Manager
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CR: explain paradox [#permalink]

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18 Oct 2004, 11:59
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Please provide your reasoning.

Thanks in advance.

CONGRESSMAN: The wealthiest 20% of our national citizens contribute more than 70% of the total income tax revenues. This unjust burden placed upon high-salaried employees who through hard work and dedication have earned the rewards their talents command.

SENATOR: While it is true the wealthiest 20% of wage earners generate more than 70% of the total income tax revenues, the current income tax system does not impose a greater hardship upon high-salaried citizens than it does those with modest incomes.

Which of the following, if true, most helps to explain the apparent paradox in the senatorâ€™s comment above?

A. Large wage-earners generally have more opportunities to supplement their incomes through investments and tax-free accounts.
B. Many wealthy individuals have funds available to them is saving accounts that can be used to pay their income taxes.
C. The current tax code is based on democratically approved schedule of tiered rates that are applied to citizens accordingly to their total earnings.
D. Inherited fortunes, dividends and interests are all exempt from tax under the current tax system.
E. The economic disparity in this country is so great that the wealthiest 20% of workers earn 75% of the total income.
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18 Oct 2004, 14:04
I believe it is (A).

The large wage earners get most of their income from their investsments. This cannot be related to their hard work or talent. The small amount of money they get to do their work is taxed on par with other citizens and hence the tax system system does not impose a greater hardship on wealthy individuals and at the ame time collects more money from wealthy individuals.
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18 Oct 2004, 14:24
I would go with E though
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18 Oct 2004, 14:49
I would go with E and try to explain with numbers if my answer is correct.
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18 Oct 2004, 15:01
yes, OA is E.
BTW, my answer was A as Anandk's with similar reasoning. but it's wrong.

So, Bhai please explain your reasoning.
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18 Oct 2004, 18:55
hi Boksana,

I honestly try to apply a principle while solving CR problems but I have failed many times in doing that.

When an argument asks which of the following if TRUE ....

then anything outside the scope of the text of the argument can be applied to either refute or strengthen the argument. However if any of the choices bring in a possibility versus a definitive answer then we can reject it rightout for something that provides definitive answer.

For example in the pradoc CR
(A) and (E) are the contenders. But (A) just brings in a possibility saying more opportunities exist. Does this mean the high income people are making money through these opportunities. We cannot assume that.

(E) gives a definitive answer. Tax is always on a %age basis. More you earn more you pay and it has nothing to do with how hard or easy you work. The same applies to people with low incomes.
18 Oct 2004, 18:55
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# CR: explain paradox

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