hellosanthosh2k2 wrote:
Hi
mikemcgarry I have one question. The Mayor's argument is "this change will not contribute to any loss in tax revenue for the city", so as per choice D, " The annual percentage rise in real estate values in Dismaston has been consistently more...", even if businesses make more growth, as long as amount of property and value of the properties raise, city can continue to get revenue as the mayor claims. I am not able to see how negation of D weakens the argument.
Had mayor argued that new tax code based on property tax would be better than tax code based on businesses profits, choice D would have been perfect assumption.
I felt choice E is the assumption. Please help me eliminate E.
Thanks
Dear
hellosanthosh2k2,
I'm happy to respond.
First of all, this is tricky. We are finding the assumption to the argument, but
which argument? The major makes an original argument. Then the city council makes a conflicting argument. Then the
urban planner, the speaker here, makes the argument that, "
council members’ argument is without merit." This is the argument that we are trying to support: we are trying to find the assumption of the
urban planner's argument, the argument against the city council's claim.
I'll also say: to really get into the logic of GMAT CR, you can't think in terms of abstract logic: instead, you have to think like a business person. See:
GMAT Critical Reasoning and Outside KnowledgeSuppose a business person has to choose between option A and option B. Suppose he chooses option A and gains $10,000, but if he had chosen option B, he would have made $50,000. In business terms, he lost money by choosing A. If his boss were reprimanding him for choosing A rather than B (suppose there was some data that this person had overlooked about the advantage of B), then telling his boss, "
But A still made money" would be a useless and pointless defense and the boss is going to get madder if she hears that. If you make a choice that makes you less money than you could have made, then for all intents and purposes, you have lost that money.
Thus, if (D) is false, if business profits rise faster than real estate, then by choosing this plan, Dismaston would be making less money in terms of tax income than it could have made, and the city council would be in every position to tell the mayor that his plan, his choice of taxing property, resulted in Dismaston losing money it could have made. That's a loss and the city council could accuse the mayor on this basis. At that point, it would be completely useless for the mayor to object, "Even though we made less money, we still made money."
Now, let's think about (E). Here's (E):
(E)
In any year, some unsuccessful businesses will close and other businesses, some quite promising, will open, but total amount of property in the city is fixed and unchanging, providing greater stability.
So, from this we know property is fixed, so presumably income from property tax would be fixed. How does that compare to business income? What does this choice imply about business income?
We know some unsuccessful (i.e. low income, low profit) business close (a small loss), and other open (a gain). Some of the ones that open are very successful ==> high income, high profit ==> high gain in the current tax structure. So, overall, business has some loss and some gain.
How does the net result of gain & loss in revenue from income/profit tax compare to the relatively constant value of property tax? It's really unclear! It
could be that the income/revenue has a net gain, so that it does better than the fixed constant of property tax, or it
could be that the latter comes out to a net loss, so that the fixed constant value of property tax is better. We don't know which way it will go.
If we have no idea whether a statement is strengthener or a weakener, then it most certainly can't be an assumption of the argument.
Does all this make sense?
Mike
, Thank you for detailed explanation, it makes lot of sense. +1 to you