It is sometimes argued that U.S. income-tax laws must have some large

Question

It is sometimes argued that U.S. income-tax laws must have some large 'loop-holes' because some very wealthy individuals pay very little income tax in a given year.

Which of the following, if it is a fact, most strongly refutes this argument?

A) Wealthy individuals, unlike the average taxpayer, usually employ specialized tax lawyers and accountants to prepare their returns.

B) It is quite possible for an individual to be wealthy and yet to have very little net income in a given year.

C) Wealthy people, in comparison with the average taxpayer, tend to spend a larger proportion of their income on services rather than on commodities.

D) Wealthy people, even if they earn their income in the U.S., tend to spend a larger part of their income abroad.

E) Highly paid people, on the average, do more worthwhile work per dollar earned than do those who are less highly paid.

Source: 800-Score

akela · Answer

Should be B. Someone wealthy without a job doesn't have to pay income tax
What is OA?

akshata19 · Answer

Goal To Weaken :
U.S. income-tax laws must have some large 'loop-holes'...

We have to find an option that says there are no loopholes 
So 'B' fits perfectly

C D E are out of scope

A- looks to be a trap option.. 
Hiring a specialist may mean they know the loophole and take advantage of it. 
It can also mean they just know how to save tax in an efficient way and there are absolutely no loopholes in the system
So it cannot be A

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stne · Answer

It is sometimes argued that U.S. income-tax laws must have some large 'loop-holes' because some very wealthy individuals pay very little income tax in a given year.

Which of the following, if it is a fact, most strongly refutes this argument?

A) Wealthy individuals, unlike the average taxpayer, usually employ specialized tax lawyers and accountants to prepare their returns.  Wealthy individual's Accountants and lawyers can only save tax up to a certain point. Hence this fact cannot make wealthy people pay less than the average tax payer. Incorrect
 
B) It is quite possible for an individual to be wealthy and yet to have very little net income in a given year.-  Correct

C) Wealthy people, in comparison with the average taxpayer, tend to spend a larger proportion of their income on services rather than on commodities.-  Does not explain how spending on commodities can help one to pay less tax. Incorrect. 
 
D) Wealthy people, even if they earn their income in the U.S., tend to spend a larger part of their income abroad.-  Not relevant. Incorrect.

E) Highly paid people, on the average, do more worthwhile work per dollar earned than do those who are less highly paid.  Not relevant Incorrect.

IMO B

HKD1710 · Answer

It is sometimes argued that U.S. income-tax laws must have some large 'loop-holes' because some very wealthy individuals pay very little income tax in a given year.

Which of the following, if it is a fact, most strongly refutes this argument?

A) Wealthy individuals, unlike the average taxpayer, usually employ specialized tax lawyers and accountants to prepare their returns.

B) It is quite possible for an individual to be wealthy and yet to have very little net income in a given year.

C) Wealthy people, in comparison with the average taxpayer, tend to spend a larger proportion of their income on services rather than on commodities.

D) Wealthy people, even if they earn their income in the U.S., tend to spend a larger part of their income abroad.

E) Highly paid people, on the average, do more worthwhile work per dollar earned than do those who are less highly paid.

Source: 800Score

niks18 · Answer

IMO  B

Tax is paid on income, so if on books income is low or there is a net loss then income tax will be low

A) Wealthy individuals, unlike the average taxpayer, usually employ specialized tax lawyers and accountants to prepare their returns.---- Irrrelevant

B) It is quite possible for an individual to be wealthy and yet to have very little net income in a given year.---- Correct. this provides a situation where income is low, hence tax paid will be low

C) Wealthy people, in comparison with the average taxpayer, tend to spend a larger proportion of their income on services rather than on commodities.----- personal expenditure will not impact tax unless it is done in Tax saving instruments

D) Wealthy people, even if they earn their income in the U.S., tend to spend a larger part of their income abroad.----- it doesn't matter where the income is spent. if income is earned then tax will be deducted at soruce

E) Highly paid people, on the average, do more worthwhile work per dollar earned than do those who are less highly paid.------ Irrelevant

VerbalBot · Answer

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It is sometimes argued that U.S. income-tax laws must have some large

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It is sometimes argued that U.S. income-tax laws must have some large

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