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# Economist: Currently, many countries rely primarily on taxing income t

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Director
Joined: 30 Jan 2016
Posts: 659
Location: United States (MA)
Economist: Currently, many countries rely primarily on taxing income t  [#permalink]

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02 Feb 2018, 09:43
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Difficulty:

55% (hard)

Question Stats:

63% (01:28) correct 37% (01:11) wrong based on 94 sessions

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Eсonomist: Currently, many countries rely primarily on taxing income to fund government expenditures. But taxing income does nothing to promote savings and investment. Taxing consumption, on the other hand, would encourage savings. The most important challenge facing these countries is improving theiir economies, and the only way to accomplish this is to increase their savings rates. Hence, _____________

Which one of the following most logically completes the eсonomist' s argument?

(A) most governments should stop taxing savings and investment
(B) the economies of countries will rapidly improve if their governments adopt tax policies that encourage savings and investment
(C) in most countries taxes on consumption alone could raise adequate revenues to fund government expenditures
(D) the tax laws of many countries should be revised to focus on taxing consumption rather than income
(E) it is detrimental to the economic improvement of any country to continue to tax income

Source: LSAT

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Senior Manager
Joined: 15 Oct 2017
Posts: 276
Re: Economist: Currently, many countries rely primarily on taxing income t  [#permalink]

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02 Feb 2018, 13:21
Narrowed it down to B & D but eventually D because B talks about countries (argument is about many countries, not all) in general & in exaggeration (says "rapidly improve") and not the specific countries that impose tax on income.
BSchool Forum Moderator
Joined: 28 Mar 2017
Posts: 1097
Location: India
GMAT 1: 730 Q49 V41
GPA: 4
Re: Economist: Currently, many countries rely primarily on taxing income t  [#permalink]

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10 Feb 2018, 09:23
Eсonomist: Currently, many countries rely primarily on taxing income to fund government expenditures. But taxing income does nothing to promote savings and investment. Taxing consumption, on the other hand, would encourage savings. The most important challenge facing these countries is improving theiir economies, and the only way to accomplish this is to increase their savings rates. Hence, _____________

Which one of the following most logically completes the eсonomist' s argument?

(A) most governments should stop taxing savings and investment
This is an exaggerated statement

(B) the economies of countries will rapidly improve if their governments adopt tax policies that encourage savings and investment
This is a hypothesis. Out of scope

(C) in most countries taxes on consumption alone could raise adequate revenues to fund government expenditures
This is an exaggerated choice

(D) the tax laws of many countries should be revised to focus on taxing consumption rather than income
Correct

(E) it is detrimental to the economic improvement of any country to continue to tax income
This is opposite of what is stated in the passage
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Re: Economist: Currently, many countries rely primarily on taxing income t &nbs [#permalink] 10 Feb 2018, 09:23
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