Check GMAT Club Decision Tracker for the Latest School Decision Releases https://gmatclub.com/AppTrack

It is currently 22 May 2017, 17:50

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

Verbal review 2nd ed- question 69

  post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:

Hide Tags

Intern
Intern
avatar
Joined: 07 Mar 2013
Posts: 6
Followers: 0

Kudos [?]: 6 [0], given: 0

Verbal review 2nd ed- question 69 [#permalink]

Show Tags

New post 13 Nov 2013, 11:31
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

79% (01:38) correct 21% (02:06) wrong based on 35 sessions

HideShow timer Statistics

When people evade income taxes by not declaring taxable income, a vicious cycle results. Tax evasion forces lawmakers to raise income tax rates, which causes the tax burden on nonevading taxpayers to become heavier. This, in turn, encourages even more taxpayers to evade income taxes by hiding taxable income.

The vicious cycle described above could not result unless which of the following were true?

(A) An increase in tax rates tends to function as an incentive for taxpayers to try to increase their pretax incomes.
(B) Some methods for detecting tax evaders, and thus recovering some tax revenue lost through evasion, bring in more than they cost, but their success rate varies from year to year.
(C) When lawmakers establish income tax rates in order to generate a certain level of revenue, they do not allow adequately for revenue that will be lost through evasion.
(D) No one who routinely hides some taxable income can be induced by a lowering of tax rates to stop hiding such income unless fines for evaders are raised at the same time.
(E) Taxpayers do not differ from each other with respect to the rate of taxation that will cause them to evade taxes.

Analysis:
i do not find a reason to eliminate A, if the rate tends to incentive taxpayers to increase their pretax incomes, They might not be motivates to evade taxes.
I know C is the correct answer, but at first glance it seems like it is OFS. the argument does not states that the reason to increase rates is to generate revenue.

Please could someone explain?

thanks

Alexis
Request Expert Reply
If you have any questions
you can ask an expert
New!
Manager
Manager
avatar
Joined: 05 Nov 2012
Posts: 170
Followers: 1

Kudos [?]: 34 [0], given: 57

Re: Verbal review 2nd ed- question 69 [#permalink]

Show Tags

New post 13 Nov 2013, 15:33
Moderator
Moderator
User avatar
S
Joined: 01 Sep 2010
Posts: 3164
Followers: 854

Kudos [?]: 7280 [0], given: 1063

Re: Verbal review 2nd ed- question 69 [#permalink]

Show Tags

New post 14 Nov 2013, 02:57
Re: Verbal review 2nd ed- question 69   [#permalink] 14 Nov 2013, 02:57
    Similar topics Author Replies Last post
Similar
Topics:
7 Experts publish their posts in the topic Verbal Review 16 Ed- Which of the following most logically completes keats 6 14 Mar 2017, 15:16
10 Experts publish their posts in the topic Verbal Review 16 Ed- If our museum lends Venus to the Hart Institute keats 6 24 Feb 2017, 13:44
1 Experts publish their posts in the topic VERBAL REVIEW 2 - CR - 69 gmat2013s 6 05 Apr 2014, 08:20
11 Experts publish their posts in the topic CR- Verbal Review 2nd ed question 51 Alexisvargas10 7 25 Aug 2016, 04:23
1 Experts publish their posts in the topic I had done all the CR questions in the Verbal Review (2nd M23A 3 25 Aug 2016, 03:52
Display posts from previous: Sort by

Verbal review 2nd ed- question 69

  post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.