It is true that developments since the last war in Britain have so inc

Question

It is true that developments since the last war in Britain have so increased the progressive character of the income tax as to make the burden of taxation progressive throughout and that, through redistributive expenditure on subsidies and services, the income of the very lowest classes has been increased... by as much as 22 percent. But the latter development is little dependent on the present high rates of progression but is financed mainly by the contributions of the middle and upper ranges of the middle class.

All arguments in support of progression can be used to justify any degree of progression. Its advocates may realize that beyond a certain point the adverse effects on the efficiency of the economic system may become so serious as to make it inexpedient to push it any further. But the argument based on the presumed justice of progression provides for no limitation, as has often been admitted by its supporters, before all incomes above a certain figure are confiscated and those below left untaxed. Unlike proportionality, progression provides no principle that tells us what the relative burden of different persons ought to be. It is no more than a rejection of proportionality in favor of a discrimination against the wealthy without any criterion for limiting the extent of this discrimination. Because there is no real rate of progression that can be demonstrated by formula, it is only the newness of the principle that has prevented its being carried at once to punitive rates. But there is no reason why 'a little more than before' should not always be represented as just and reasonable.

It is the great merit of proportional taxation that it provides a rule which is likely to be agreed upon by those who will pay absolutely more and those who will pay absolutely less and which, once accepted, raises no problem of a separate rule applying only to a minority. Even if progressive taxation does not name the individuals to be taxed at a higher rate, it discriminates by introducing a distinction that aims at shifting the burden from those who determine the rates onto others. In no sense can a progressive scale of taxation be regarded as a general rule applicable equally to all. In no sense can it be said that a tax of 20 percent on one person's income and a tax of 75 percent on the larger income of another person are equal. Progression provides no criterion whatever of what is and what is not to be regarded as just. It indicates no halting point for its application, and the 'good judgment' of the people on which its defenders are usually driven to rely as the only safeguard is nothing more than the current state of opinion shaped by past policy.    1  
 1. What is the primary focus of this passage?

A. subsidies and services
B. punitive rates of taxation
C. progressive taxation
D. proportional taxation
E. rate of proportionality determined by formula

2  
 2. This passage argues against a separate rate of taxation for a minority on the grounds that it is:

A. financially unfeasible
B. monetarily irresponsible
C. unjustly discriminatory
D. based on changing public opinion
E. reactive to major social change

3  
 3. Which of the following is an effect of the progressive-income tax?

A. It has increased the income of the lowest classes by as much as 22 percent.
B. It provides a principle by which taxation may be limited.
C. It limits discrimination against the wealthy.
D. It applies generally to all.
E. It cannot be carried to punitive rates.

RC Butler 2022  -  Practice Two RC Passages Everyday.   
Passage # 237 Date: 14-Jun-2022
 This question is a part of RC Butler 2022 .  Click here for Details

Siva612 · Answer

Someone explain Q.no 3 please..

dipanjandua · Answer

Someone please explain q no 1 (primary purpose)

1. What is the primary focus of this passage?

A. subsidies and services
B. punitive rates of taxation
C. progressive taxation
D. proportional taxation
E. rate of proportionality determined by formula

Sajjad1994 · Answer

Explanation

1. What is the primary focus of this passage?

Difficulty Level:   600

Explanation

A.  While the passage does mention redistributive expenditure on subsidies and services as a part of the developments in Britain, it is not the primary focus of the passage. The main concern is the nature and critique of progressive taxation.

B.  The passage does discuss the potential for progression to reach punitive rates, but this is not the primary focus. The author is critical of the lack of a clear principle in progressive taxation and argues that it might eventually lead to punitive rates.

C.  This is the correct answer. The passage primarily focuses on progressive taxation, discussing its developments in Britain, its potential drawbacks, and comparing it to proportional taxation.

D.  The passage contrasts progressive taxation with proportional taxation, highlighting the perceived merits of the latter. It argues that proportional taxation provides a rule likely to be agreed upon without introducing a discriminatory distinction.

E.  The passage suggests that progressive taxation lacks a clear formula for determining the rate of progression, making it a point of criticism. The absence of a demonstrated formula is one of the reasons the author questions the fairness of progressive taxation.

Answer: C

Sajjad1994 · Answer

Explanation

3. Which of the following is an effect of the progressive-income tax?

Difficulty Level:   650-700

Explanation

A.   The passage states that developments in Britain, including the increased progressive nature of the income tax, have led to redistributive expenditure on subsidies and services, resulting in an increase in the income of the very lowest classes by as much as 22 percent. This aligns with option A.

B.  The passage argues that progression, unlike proportionality, provides no principle for limiting the extent of taxation. It suggests that advocates of progression may not have a clear limitation before all incomes above a certain figure are confiscated.

C.  The passage argues the opposite. It states that progression is a rejection of proportionality in favor of discrimination against the wealthy. It criticizes the lack of a criterion for limiting this discrimination.

D.  The passage argues that a progressive scale of taxation cannot be regarded as a general rule applicable equally to all. It introduces a distinction that aims at shifting the burden from those who determine the rates onto others.

E.  The passage acknowledges that the newness of the principle of progression has prevented it from being carried to punitive rates so far. However, it suggests that there is no inherent reason why it couldn't be carried to punitive rates in the future, especially as there is no real rate of progression demonstrated by formula.

Answer: A

It is true that developments since the last war in Britain have so inc

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GMAT Reading Comprehension (RC) Questions

It is true that developments since the last war in Britain have so inc

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