The government of Defastena is planning to introduce additional income

Question

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.

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ManifestDreamMBA · Answer

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.

Thinking:  Look for something that suggests how taxes wil help create more jobs

(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.
 Makes sense, this justifies how the taxes will create more jobs

(B) Most of the corporations in Defastena that have more than 500 employees have at least 1,000 employees.
 Irrelevant, how many employees over 500 is not a concern

(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.
 Irrelevant, doesn't help

(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.
 Even if lay off happens, it doesn't suggest how more jobs will be available. It will in fact, reduce the number of jobs

(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.
 Irrelevant, we are concerned about changes within Defastena and not how it compares to the outside world

Whoisdmx15 · Answer

(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 .  Suitable  This explains why govt contends that the increase in taxes will lead to higher employment.

(B) Most of the corporations in Defastena that have more than 500 employees have at least 1,000 employees.  Eliminated  Out of context, does nothing to outcome.

(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. Eliminated Out of context, does nothing to outcome.

(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. Eliminated  No layoffs does not ascertain increase in employment.

(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. Eliminated  This weakens the conclusion.

Su1206 · Answer

The 'if true' language suggests this is a strengthen question. We have to find additional piece of evidence which makes governments plan more likely to suceed i.e Net number of jobs will increase. Please note  'will increase'  does not equate to  'not decrease'

(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. -  So, the loss of 'increase in employment by large corporations' will be more than offset by hiring by small companies.  This sounds CORRECT.

(B) Most of the corporations in Defastena that have more than 500 employees have at least 1,000 employees. -  This provides no evidence how the plan will pan out. Thus,  irrelevant and INCORRECT.

(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. -  OK, so it will have 'no effect' on reducing unemployment, which means the unemployment will not decrease i.e number of jobs will not increase.  This kind of weakens, rather than strengthens. INCORRECT. 
 
(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. -  So employess will not be fired i.e  jobs will 'not decrease'. As discussed before, this does not equate to 'will increase'. INCORRECT. 
 
(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. -  Totally irrelevant to argument.  INCORRECT.

If you like my answers, do leave a upvote. It motivates me.  
  Su!

Bunuel · Answer

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.

The government of Defastena is planning to introduce additional income

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The government of Defastena is planning to introduce additional income

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