Bunuel wrote:
The government of Defastena is planning to introduce additional income taxes on corporations with 500 or more employees. Large corporations in Defastena have complained that the additional taxes will provide a disincentive for companies to grow, and thus limit the number of jobs available to Defastena residents. Nevertheless, the government contends that the taxes will ultimately result in more jobs for Defastena residents.
Which of the following, if true, provides the strongest support for the government's contention?
(A) The government will spend the revenue from the tax to subsidize small companies, which hire new employees at a faster rate than do large companies in Defastena.
(B) Most of the corporations in Defastena that have more than 500 employees have at least 1,000 employees.
(C) The additional taxes will have no have effect on education and job-training programs that the Defastena government currently offers with the goal of reducing unemployment.
(D) The tax rate on large corporations will be set at a level such that corporations with 500 or more employees will be unlikely to lay o§ employees so that they are not subject to the taxes.
(E) Compared to the seven countries that share a border with it, Defastena already has the highest corporate tax rate, yet it has one of the lowest unemployment rates.
OFFICIAL EXPLANATION
A
The phrase "strongest support" signals a strengthen question. The argument explains that taxes will keep companies from growing past a certain size (500 employees), but that the tax will end up having a somewhat paradoxical effect of adding jobs.
Choice (A) explains how that might happen. The tax will lead to money for small companies, which will hire employees, and will do so "at a faster rate than large companies". That would seem to address the paradox. (B) doesn't matter, as it doesn't address job growth. (C) "like most choices that say something will stay the same, or has no effect" is incorrect. We need a reason why something will create job growth to outweigh the loss created by the tax, and something static won't accomplish that.
Choice (D) tells us why some jobs won't be lost, but we need a reason why jobs will be gained in addition to that. (E), like (C), addresses something in the present that sounds consistent. However, we need to find out something that will change, preferably due to the tax that creates this paradox.
Choice (A) is correct.