chetan86 wrote:
Legislator: Recently, the state's small-business association proposed a plan to allow small (as defined by law) retail establishments to deduct the cost of unsold inventory from their tax liability. The association's spokesperson emphasized that, since smaller businesses have less money with which to purchase inventory, the proposed measure would help those smaller retailers remain competitive with their larger counterparts. Nevertheless, in practical terms, fair enforcement of the plan would be infeasible, because ________.
It is always better to solve CR questions by using P.O.E. method i.e. Process of Elimination.TYPE- PLAN & GOAL PLAN- Allow Smal RBs to deduct cost of unsold inventory from their Taxes
GOAL-To help keep Small RBs competitive with the Large RBs
Conclusion- "Fair" enforcement is not feasible.
Quote:
(A) several new state employees would have to be hired to audit the new deductions
It could be difficult to hire so many new employees but is this option taking about how fairness will be impacted while enforcing the law? I don't believe so,
ELMINATE.Quote:
(B) it is not possible to distinguish unsold inventory from the store proprietors' personal purchases
If it is not possible to distinguish between unsold and what a store purchased for its' own consumption, then this can impact the "fairness" aspect during the implementation of the proposed plan because a store can cheat and report its' personal consumption inventory as an unsold one in order to maximize Tax deductions.
HOLD.Quote:
(C) stores would have to repay the deducted amount of tax if they sold the inventory in question at a later date
Ya so what? This additional step may lead to a little inconvenience to the store owners or may delay the tax collection drive, but this option is not talking about our concern i.e. Can the proposed plan be implemented fairly?
ELMINATE.Quote:
(D) the threshold of sales below which a business legally qualifies legally as "small" was set by the state legislature in response to a different proposal
The legality of a Small RBs is not our pain point.
ELMINATE.Quote:
(E) small businesses are less likely than their larger counterparts to have computerized or otherwise automated inventory systems
Our point of concern is not how quickly one can manage the inventory.
ELMINATE.Left with Option B.