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# Senator: The average per capita after tax income for

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Senator: The average per capita after tax income for [#permalink]

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20 Sep 2010, 11:59
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Senator: The average per capita after tax income for residents of Eastbury is \$30,105. 2 years ago, it was 11% lower. This can be directly attributed to the comprehensive set of tax cuts that I helped get approved in Congress.

Which of the following statements, if true, most strengthens the conclusion drawn by the senator ?

A. The average per capita after tax income for the residents of Eastbury who fall below poverty line increased by 16% in the last 5 years.
B. The senator has not personally benefited from the tax cuts.
C. The number of residents of Eastbury has not substantially changed in the last two years.
D. The federal tax rose 6% during the 4 years prior to the implementation of the tax cuts.
E. A recent change in the estate laws did not substantially increase the average per capita before tax income of the residents of Eastbury.

[Reveal] Spoiler:
In my Opinion Answer should be C

Conclusion: Tax cuts have resulted in the increase average per capita income, which was 11% lower

So the thought process which i took was

Average per capita income = Total income / No of residents

Avg per capita income could have also increased if no of residents would have decreased so if we ascertain that there was no substantial change in the no of residents/ population then it is strengthening the conclusion. So i chose Option C

Please explain why Option C is wrong and Option E is correct, as I find both are correct in this argument, as they both strengthen the argument.
[Reveal] Spoiler: OA

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Re: Senator: The average per capita after tax income for [#permalink]

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20 Sep 2010, 12:27
sachinrelan wrote:
Senator: The average per capita after tax income for residents of Eastbury is \$30,105. 2 years ago, it was 11% lower. This can be directly attributed to the comprehensive set of tax cuts that I helped get approved in Congress.

Which of the following statements, if true, most strengthens the conclusion drawn by the senator ?

A. The average per capita after tax income for the residents of Eastbury who fall below poverty line increased by 16% in the last 5 years.
B. The senator has not personally benefited from the tax cuts.
C. The number of residents of Eastbury has not substantially changed in the last two years.
D. The federal tax rose 6% during the 4 years prior to the implementation of the tax cuts.
E. A recent change in the estate laws did not substantially increase the average per capita before tax income of the residents of Eastbury.

In my Opinion Answer should be C

Conclusion: Tax cuts have resulted in the increase average per capita income, which was 11% lower

So the thought process which i took was

Average per capita income = Total income / No of residents

Avg per capita income could have also increased if no of residents would have decreased so if we ascertain that there was no substantial change in the no of residents/ population then it is strengthening the conclusion. So i chose Option C

Please explain why Option C is wrong and Option E is correct, as I find both are correct in this argument, as they both strengthen the argument.

Well I agree with you that this a somewhat tricky question. IMO C is wrong because the question clearly states that the income 2 years ago and now is per capita meaning that according to this data the number of residents is somewhat irrelevant. The comparison is between the averages. Also note that in order to strengthen the senator statement you should refer to the tax cuts because this is part of his conclusion. If there was no other answer that mentioned the tax cuts and that strengthened his argument, maybe than you could consider C.
Also pay attention to the number of logical steps you had to take in order to come up with the conclusion that C strengthens the argument, this is a clear warning sign. The fewer the steps the better.

Hope that helps
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Re: Senator: The average per capita after tax income for [#permalink]

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20 Sep 2010, 12:47
Senator: The average per capita after tax income for residents of Eastbury is \$30,105. 2 years ago, it was 11% lower. This can be directly attributed to the comprehensive set of tax cuts that I helped get approved in Congress.

Which of the following statements, if true, most strengthens the conclusion drawn by the senator ?

Synopsis:
After Comprehensive tax cut --- Per capita income after tax increased
we need to strengthen it.
Premise + Assumption -------> Conclusion
2 years ago per capita income after t was 11% lower + ( Assumption)---> Per capita income after tax increased

A)The average per capita after tax income for the residents of Eastbury who fall below poverty line increased by 16% in the last 5 years. - this tells above " people who fall below poverty line ". - Wrong answer.

B)The senator has not personally benefited from the tax cuts.- Junck Answer

c)The number of residents of Eastbury has not substantially changed in the last two years.- we dont need to consider the no of residents.

d)The federal tax rose 6% during the 4 years prior to the implementation of the tax cuts.- Nothing to do with it.

e)A recent change in the estate laws did not substantially increase the average per capita before tax income of the residents of Eastbury.- There are no other factor increased the per capita income.So only tax cuts increase the per capita income.

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Re: Senator: The average per capita after tax income for [#permalink]

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20 Sep 2010, 12:53
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The per capita incomes are averages which already take into account the population. So the factor of population isn't really counted here. However, stating that some other law has NOT increased the income directly tells us that this tax cut was an important player. Hence the answer is E. This is a tricky one, though. The kind that easily tricks people.

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Re: Senator: The average per capita after tax income for [#permalink]

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20 Sep 2010, 13:53
sachinrelan wrote:
Senator: The average per capita after tax income for residents of Eastbury is \$30,105. 2 years ago, it was 11% lower. This can be directly attributed to the comprehensive set of tax cuts that I helped get approved in Congress.

Which of the following statements, if true, most strengthens the conclusion drawn by the senator ?

A. The average per capita after tax income for the residents of Eastbury who fall below poverty line increased by 16% in the last 5 years.
B. The senator has not personally benefited from the tax cuts.
C. The number of residents of Eastbury has not substantially changed in the last two years.
D. The federal tax rose 6% during the 4 years prior to the implementation of the tax cuts.
E. A recent change in the estate laws did not substantially increase the average per capita before tax income of the residents of Eastbury.

In my Opinion Answer should be C

Conclusion: Tax cuts have resulted in the increase average per capita income, which was 11% lower

So the thought process which i took was

Average per capita income = Total income / No of residents

Avg per capita income could have also increased if no of residents would have decreased so if we ascertain that there was no substantial change in the no of residents/ population then it is strengthening the conclusion. So i chose Option C

Please explain why Option C is wrong and Option E is correct, as I find both are correct in this argument, as they both strengthen the argument.

I think this is a very bad question - where is it from?

We know that the per capita after-tax income has risen over the last two years. The senator attributes this to his or her tax cuts. This is not a particularly strong argument on the surface. After-tax income can increase because taxes go down, or because pre-tax income goes up. In addition, even if taxes went down, there may have been other tax cuts besides those introduced by the senator that are primarily responsible. Further, the average per capita income could change because the population changed in some way; perhaps there was an influx of high-income earners moving to Eastbury, or an exodus of low-income earners.

By POE we can work out what answer the question designer intends to be correct. A and D talk about time periods irrelevant to the argument (we're only concerned with what has happened over the last two years). B is entirely irrelevant.

C does not appreciably strengthen nor weaken the argument. If the population had increased, say, then not only would the number of people change, but so would the total income earned by Eastbury residents. We'd need to know something about how much these new people earned in order to determine what effect they would have on the per capita income; if they were all earning \$1,000,000 per year, then the per capita income would go up, but if they were all unemployed and earning \$0 per year, then per capita income would go down. In that C rules out an alternative explanation (change in population) for the increase in per capita income, it strengthens the argument, but only in a very insignificant way.

E is also a bad answer here. While we do want to know that average income has not risen substantially if we want to strengthen the argument, we have no compelling reason to think that estate laws have any significant effect on the average per capita income in Eastbury. There are dozens of reasons why average income could increase (employment rate might increase, or average wage might increase, for example); estate laws are (perhaps) just one of these, and there's nothing in the passage to make us think that estate laws are particularly important to Eastbury residents. So sure, E rules out one of the dozens of possible factors that could have led income to increase, but that alone does almost nothing to strengthen the argument. E would only strengthen the argument if it ruled out a significant alternative explanation for the facts in the stem, and it simply doesn't do that.

It's just not a good question.
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Re: Senator: The average per capita after tax income for [#permalink]

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20 Sep 2010, 13:55
I'd add that some might interpret E to say that average income has not increased. That is not what E says. It says that the change to estate laws did not increase average income. Other factors might still have increased average income, however; E in no way rules out that possibility.
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Re: Senator: The average per capita after tax income for [#permalink]

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20 Sep 2010, 17:45
E rules out alternate reason for increase and it's correct answer.
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Re: Senator: The average per capita after tax income for [#permalink]

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21 Sep 2010, 06:42
IanStewart wrote:
I'd add that some might interpret E to say that average income has not increased. That is not what E says. It says that the change to estate laws did not increase average income. Other factors might still have increased average income, however; E in no way rules out that possibility.

Used POE to reach E. No doubt that there can be other reasons for increase in after tax per capita income, however, within the boundaries of the 5 choices, E is the only one that made sense.

Influx of high income earners or departure of low income earners can very well be the reason. However, these are not given in the choices. Hence, as far as the reader is concerned, these are not applicable.
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Re: Senator: The average per capita after tax income for [#permalink]

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21 Sep 2010, 07:00
Used POE to reach E. No doubt that there can be other reasons for increase in after tax per capita income, however, within the boundaries of the 5 choices, E is the only one that made sense.

Influx of high income earners or departure of low income earners can very well be the reason. However, these are not given in the choices. Hence, as far as the reader is concerned, these are not applicable.

IMO E is outside the scope of the question because it talks about estate laws and average per capita before tax (not after tax) and does not strenghten the conclusion.
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Re: Senator: The average per capita after tax income for [#permalink]

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21 Sep 2010, 07:09
schemer wrote:
Used POE to reach E. No doubt that there can be other reasons for increase in after tax per capita income, however, within the boundaries of the 5 choices, E is the only one that made sense.

Influx of high income earners or departure of low income earners can very well be the reason. However, these are not given in the choices. Hence, as far as the reader is concerned, these are not applicable.

IMO E is outside the scope of the question because it talks about estate laws and average per capita before tax (not after tax) and does not strenghten the conclusion.

Before tax income, in any way, is relevant to the statement.

Agreed that E is not the perfect choice, but by POE, the only one that can makes any sense. Apart from a very stretched assumption that high income earners moved in or low income earners moved out, the only other possibility is increase in before tax income. How does that happen ? Employers increased salaries, either due to good business or a law made them do it (E.g - increase in minimum wage). Since none of the choices deal with the former, we chose the one that deals with the latter. (you can't ask for fish, when they only have chicken on the menu !)

Like Ian said, a bad question.
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Re: Senator: The average per capita after tax income for [#permalink]

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21 Sep 2010, 07:38
This is not GMAT.
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Re: Senator: The average per capita after tax income for [#permalink]

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21 Sep 2010, 07:57
schemer wrote:
This is not GMAT.

?
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Re: Senator: The average per capita after tax income for [#permalink]

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28 Jan 2011, 07:06
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Senator : The average per capita after-tax income for residents of Eastbury is \$30,105. 2 years ago, it was 11% lower. This can be directly attributer to the comprehensive set of tax cuts that I helped get approved in congress.

Which of the following statements, if true, most strengthens the conclusion drawn by the senator?

a) The average per capita after-tax income for the residents of Eastbury who fall below the poverty line increased by 16% in the last 5 years.
b) The senator has not personally benefited from the tax cuts.
c) The number of residents of Eastbury has not substantially changed in the last two eyars
d) The federal tax rate rose 6% during the 4 years prior to the implementation of the tax cuts.
e) A recent changes in the estate laws did not substantially increase the average per capita income before-tax income of the residents of Eastbury

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Re: Senator: The average per capita after tax income for [#permalink]

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28 Jan 2011, 10:02
praveenvino wrote:
Senator : The average per capita after-tax income for residents of Eastbury is \$30,105. 2 years ago, it was 11% lower. This can be directly attributer to the comprehensive set of tax cuts that I helped get approved in congress.

Which of the following statements, if true, most strengthens the conclusion drawn by the senator?

a) The average per capita after-tax income for the residents of Eastbury who fall below the poverty line increased by 16% in the last 5 years.
b) The senator has not personally benefited from the tax cuts.
c) The number of residents of Eastbury has not substantially changed in the last two eyars
d) The federal tax rate rose 6% during the 4 years prior to the implementation of the tax cuts.
e) A recent changes in the estate laws did not substantially increase the average per capita income before-tax income of the residents of Eastbury

OA is OK. But can someone explain why it cannot be C?

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Re: Senator: The average per capita after tax income for [#permalink]

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28 Jan 2011, 10:20
I think, it can not be C because the number of residents could have been decreased causing per-capita income to increase and weaking the senator's claim.

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Re: Senator: The average per capita after tax income for [#permalink]

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30 Jan 2011, 08:07
praveenvino,

It cannot be C because we are talking about per capita income which is the total after tax income divided by the number of people.If the number of people change or remain the same the per capita income will get automatically adjusted. This makes C irrelevant. This is IMHO.

Hope this helps!

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Re: Senator: The average per capita after tax income for [#permalink]

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30 Jan 2011, 23:22
By POE D or E
Choose 'D' by mistake as did not read the choice D properly
'tax rate rose 6% during the 4 years prior to the implementation of the tax cuts' --> talks about period prior to tax cuts, so D is out

It should be 'E' because -- 'recent changes in the estate laws did not substantially ' -- supports the conclusion that the increase should be because of tax cuts ... basically elimination any other cause of income increase before tax that could have led to income increase after tax.

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Re: Senator: The average per capita after tax income for [#permalink]

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03 Feb 2011, 05:58
bascially no other change brought the result except the tax cuts.
C - makes the average per capital income variable- increasing or decreasing the taxes. Hence it can effect both ways
E - prevents pre taxed per capital income to go up. Hence that should be the assumption and stregthens the senator's conclusion

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Re: Senator: The average per capita after tax income for [#permalink]

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06 May 2011, 14:05
+1 E

If the per capita income before taxes has not changed, this can suggest that the higher per capita incomes after taxes are result of the tax cuts.
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Re: Senator: The average per capita after tax income for [#permalink]

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17 May 2011, 00:18
call between C and E, where
C uses a slight assumption that since number of people have decreased,the after tax salary being same,per capita income has increased. avg = Sum/number of people.

E clearly states that the Sum itself has increased,causing the average to increase too.

Hence E.
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Re: Senator: The average per capita after tax income for   [#permalink] 17 May 2011, 00:18

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