Over the past few years, retailers in the town of

Official Explanation :

Identify the Question

We are asked to identify choices that “cast doubt on the mayor's conclusion”, so this is a weakening question. Note, however, that the goal of the question is to find the statement that does not weaken the argument.

Deconstruct the Argument

According to the argument, physical retailers in Statesville are losing business to Internet retailers, resulting in a concomitant loss of sales tax revenue for Statesville's government. To address the problem, the mayor of Statesville proposes that the town collect sales tax on all Internet purchases shipped to addresses within the town. If this measure is enacted, the mayor believes, Statesville will be able to bring its tax revenue back up to its previous levels.

State the Goal

The mayor believes that the new tax will restore the town's sales tax revenue to its original level. Therefore, any evidence that the proposed measure will not generate such additional revenue, or will generate less tax revenue than was collected before the advent of the Internet retailers, will weaken the mayor's argument.

Four of the given statements should weaken the mayor's argument; ultimately, we are looking for the one statement that does not.

Work from Wrong to Right

(A) If Internet retailers charge substantially lower prices for merchandise, and Statesville collects sales tax at the same rate used for purchases in physical stores, then Statesville will receive substantially less tax revenue from Internet purchases than it would if those purchases were made in the town's physical stores. This choice therefore weakens the mayor's argument.

(B) If this statement is true, then most residents of Statesville will be able to have Internet purchases shipped to an address outside the town, and will thus not have to pay the new tax. This statement also casts doubt on the mayor's argument.

(C) If shoppers from outside Statesville choose to purchase items on the Internet rather than in Statesville's retail stores, they will not pay the new tax, as those items will not be shipped within the town. (For purchases these customers still do choose to make at Statesville's retail stores, the argument is unaffected.) This choice serves as more evidence that the tax will not generate as much revenue as the mayor believes.

(D) If this statement is true, the total dollar amount of purchases made by Statesville's residents is likely to decrease sharply, resulting in a corresponding decrease in local tax revenue. Therefore, this choice also works against the mayor's argument.

(E) This choice does not give any evidence that local tax revenue will decrease. In fact, if Internet retailers compensate for the increase in their costs by raising the price of merchandise, Statesville's government will receive slightly more tax revenue from its residents' purchases of that merchandise. This choice thus works in favor of the mayor's argument, not against it.

The correct answer is E.