The passage boils down to an argument that the 600 mn either goes to the people in the province or the public servants. If it goes to people you end up with public servants not getting 600 mn since they will be fired. If it goes to the public servants in salary, then the people in the province don't get it. Basically the TOTAL amount of spending is not going to change.
Party spokesperson: The opposition party’s proposal to stimulate economic activity in the province by refunding $600 million in provincial taxes to taxpayers, who could be expected to spend the money, envisions an illusory benefit. Since the province’s budget is required to be in balance, either new taxes would be needed to make up the shortfall, in which case the purpose of the refund would be defeated, or else workers for the province would be dismissed. So either the province’s taxpayers or its workers, who are also residents of the province, will have the $600 million to spend, but there can be no resulting net increase in spending to stimulate the province’s economy.
The spokesperson proceeds by
(A) reinterpreting a term that is central to an opposing argument
Nope. Nothing like that going on, I daresay.
(B) arguing that a predicted advantage would be offset by an accompanying disadvantage
Exactly. Either the public or the public servants get the money. It will either be countered by taxes or people losing their jobs.
(C) casting doubt on the motives of opponents
Nope. Nothing like that.
(D) drawing a distinction between different kinds of economic activity
Nope.
(E) seeking to show that the assumption that taxpayers would spend money that might be refunded to them is dubious
Nope. Seems like the POE on this one wasn't that hard.
5 Verbal tips from a V48 GMAT Tutor