KAPLAN OFFICIAL EXPLANATION:

STEP 1: IDENTIFY THE QUESTION TYPE
The question stem asks you to identify the fact that will most undermine the spokesperson’s argument, so this is a Weaken question.

STEP 2: UNTANGLE THE STIMULUS
The spokesperson claims that Southtown’s lower business tax rate creates a better business environment. The evidence is the lower amount of business taxes collected in Southtown. Thus, the spokesperson is equating lower total business tax receipts with a lesser impact on an individual business that might start up in Southtown.

STEP 3: PREDICT THE ANSWER
While the amount of taxes collected is lower, that doesn’t mean that Southtown has the lower tax rate. Perhaps Southtown has fewer businesses and collected the smaller amount by taking a larger percentage of taxes from those businesses. A good prediction would be “anything that says Southtown may have a smaller amount of business profits to tax or a higher rate of taxation.”

STEP 4: EVALUATE THE CHOICES
(C) matches the prediction and is correct. If Northtown has twice the business profits and doesn’t collect twice the tax revenue of Southtown, then Northtown has the lower tax rate. Thus, a business that started in Northtown would pay less taxes. The argument is only about the impact of business taxes, so whether a smaller or larger proportion of all taxes are business taxes has nothing to do with tax rates and is irrelevant to the conclusion; eliminate (A) and (B). (D) is irrelevant because the size of the population does not necessarily correspond to the amount of business profits or business taxes collected. (E) is irrelevant because business taxes are not assessed on sales but on profits, and if they were assessed on sales, this choice would strengthen, not weaken, the argument.
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Read the question first

This is a weaken question.

Conclusion: South town business tax rate is lower and offers favourable environment

Pre-think:
What if the total business revenue in South town is actually higher than that of Northtown?

Only C out of all options, matches our predicted answer

The city of Northtown collects an average of $2.2 million in business taxes per year. Neighboring Southtown collects an average of $1.8 million in business taxes per year. Both cities assess business taxes on net profits. In an attempt to attract new businesses to Southtown, the spokesperson for the chamber of commerce of that city uses these statistics to claim that Southtown’s lower business tax rate offers amore favorable environment for business than can be found in Northtown.

Which of the following, if true, would most seriously undermine the spokesperson’s argument?


(A) Most tax revenue collected in Northtown comes from business taxes.

(B) Most tax revenue collected in Southtown comes from business taxes.

(C) The net profits generated by Northtown businesses are currently twice those of Southtown businesses.

(D) Northtown has twice the population of Southtown.

(E) Southtown businesses generate twice as much sales revenue as do Northtown businesses.

Posted from my mobile device

C?
More profitable in Northtown means it is not as favorable to do business in Southtown despite lower tax rate.

Posted from my mobile device
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The OA for this question has to be C, as it is the only answer that gives up an alternative explanation other than what "the spokesperson for the chamber of commerce of that city" of Southtown claims to be the reason that Northtown has higher revenue is due to higher taxes.

Options A and B are out as they are Out Of Scope, the stimulus doesn't talk about whether the tax revenue of either town mostly constitutes of business taxes or not.

Option D is out as it the stimulus talks about business taxes and not about personal taxes and the stimulus in no way gives a hint as to what proportion of people of either town are involved in business.

Option E is out as it is an opposite answer that strengthens the author's position.

The conclusion - southtown has lower tax rate so it is better for business

a and b only speak about one town and doesn't weaken the conclusion - so incorrect

D talks about population

E- the taxes are based on profits not sales so incorrect

C correctly says that what if profits of north town are double - that means the tax should also be double ~ 3.6 (1.8*2) but the tax is 2.2 implying that the tax rate is indeed lower so C weakens

C imo

Regards,
HK
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imo C
The city of Northtown collects an average of $2.2 million in business taxes per year. Neighboring Southtown collects an average of $1.8 million in business taxes per year. Both cities assess business taxes on net profits. In an attempt to attract new businesses to Southtown, the spokesperson for the chamber of commerce of that city uses these statistics to claim that Southtown’s lower business tax rate offers amore favorable environment for business than can be found in Northtown.

Which of the following, if true, would most seriously undermine the spokesperson’s argument?

since Both cities assess business taxes on net profits.. There can be a situation that higher the taxes means higher profit ..i.e more favorable business env.

Option C tells exactly that .,..

(A) Most tax revenue collected in Northtown comes from business taxes. -- irrelevant

(B) Most tax revenue collected in Southtown comes from business taxes. -- irrelevant

(C) The net profits generated by Northtown businesses are currently twice those of Southtown businesses.

(D) Northtown has twice the population of Southtown. -- population is irrelevant

(E) Southtown businesses generate twice as much sales revenue as do Northtown businesses.
-- We have a better direct concrete choice as C . Out

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Pre-thinking: Southtown’s lower business tax rate is better for business than Northtown. We need see a benefit in Northtown or flaw in Southtown.

Which of the following, if true, would most seriously undermine the spokesperson’s argument?

(A) Most tax revenue collected in Northtown comes from business taxes. -> It is not talking about business rate.

(B) Most tax revenue collected in Southtown comes from business taxes. -> It is not talking about business rate.

(C) The net profits generated by Northtown businesses are currently twice those of Southtown businesses. -> It means, tax rates are lower in "Northtown businesses". Let's keep it.

(D) Northtown has twice the population of Southtown. -> Irrelevant.

(E) Southtown businesses generate twice as much sales revenue as do Northtown businesses. -> Revenue is not linked with Tax rate. Incorrect.

So, I think C.

Simple. The author assumes that the amount of dollars paid necessarily implies a higher tax rate. For all we know, N could simply have more businesses.

IMO answer C