Benjamin Franklin once said that the only two certainties in life are

Question

Benjamin Franklin once said that the only two certainties in life are death and taxes, and the residents of some European countries can add tax upon death to that list. Inheritance tax is what one pays if one’s collective asset exceeds a minimum threshold. Inheritance laws are surrounded in controversy because  the theoretical basis  as to why one pays the tax in the first place has been deemed dubious. Even so, inheritance tax is likely to be sticking around for some time.

Inheritance tax was introduced in European countries in the 1790s and stemmed from the influence of the French Revolution, the influence of the ideas of Liberty, Equality, and Fraternity. The French Revolution philosophy led to the perception of the then current French system as keeping the rich wealthy and poor excluded, as money was simply handed down to the already wealthy. The concept of inheritance tax was introduced to interrupt the legacy of inherited wealth and protect the poorer members of society. In spirit, an inheritance tax was meant to redistribute wealth, taking money from the very rich via taxes and redistributing that money amongst the population.

The cited problem with this ideology is that the money earned has been taxed throughout a person’s life, and so to tax it again upon death is unfair. Another concern is that it is not exclusively the very wealthy who get taxed and that the particularly affluent are anyway likely to have financial advisors in place who will have already found means to reduce the taxable amounts. In reality, inheritance tax often hits those who just meet the threshold hardest; they may have spent their whole lives building up financial security to pass on to their children only to have it hugely reduced upon death. In this instance, the  revolutionary vision  of the redistribution of wealth fails.   1 
 1. Which of the following best describes the usage of the term “the theoretical basis” (see highlighted text) in the context of the first paragraph?

A. To justify the collection of the inheritance tax when assets exceed a theoretical minimum threshold
B. To explain why the inheritance tax is likely to be sticking around
C. To question the basis of all tax collection
D. To indicate doubt regarding the need for the inheritance tax
E. To support the inheritance tax because it has a strong theoretical base

2 
 2. Which of the following, if true since the time inheritance tax was introduced, would most tend to weaken the conclusions drawn about the failure of the revolutionary vision (see highlighted text)?

A. The average earning of the poorest families has risen steadily.
B. The richest and poorest families have been known to change every two generations.
C. Some extremely wealthy families are not so wealthy anymore.
D. Tax is levied only upon those individuals owning assets over a certain level. 
E. The poor families are aided by the governments in meeting their basic needs.

3 
 3. Which of the following statements is least consistent with the passage?

A. Some European citizens have a reason to believe that there are three certainties in life.
B. Taxing the same amount twice is unfair.
C. The inheritance tax will always remain, despite its controversial nature.
D. Inheritance tax can be reduced with sound financial planning.
E. There was no inheritance tax in France before the French Revolution.

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Dereno · Answer

1. Which of the following best describes the usage of the term “the theoretical basis” (see highlighted text) in the context of the first paragraph?

A. To justify the collection of the inheritance tax when assets exceed a theoretical minimum threshold.

To justify collection we have the inheritance laws, which clearly define when an inheritance tax is being collected. This doesn’t speak about the theoretical basis, thus wrong.

B. To explain why the inheritance tax is likely to be sticking around.

Passage 1 says, inheritance tax even though dubious, is likely to stick around for some time. This doesn’t address the highlighted text. Thus, wrong.

C. To question the basis of all tax collection.

The entire passage is about inheritance tax, while this option speaks about all taxes. Which is completely irrelevant to the context. Thus, wrong.

D. To indicate doubt regarding the need for the inheritance tax.

This is the correct answer. In the first para : these lines “   Inheritance laws are surrounded in controversy because    the theoretical basis      as to  why one pays the tax in the first place  has been deemed dubious.  “ .

The controversial nature of why one pays this tax at the first instance seems uncertain or unconvincing.

E. To support the inheritance tax because it has a strong theoretical base.

The highlighted text is not about supporting the inheritance tax, but raising the doubt that inheritance tax doesn’t have a theoretical basis on why it’s being collected. Thus, wrong.

Option D

2. Which of the following, if true since the time inheritance tax was introduced, would most tend to weaken the conclusions drawn about the failure of the revolutionary vision (see highlighted text)?

First of all let’s understand what the conclusion - In this instance, revolutionary vision of the redistribution of wealth is going to fail.

so, what’s the revolutionary vision. It’s the passing of inheritance laws post French Revolution to bridge the yawning gap between the rich and poor. So, to facilitate the redistribution of wealth by taxing the rich, who own properties, and are inherited generations after generations.

Why does it fail now? Because, the poor people after generations have hard earned a property which has  just  
exceeded the inheritance threshold, and is now taxed heavily.

A. The average earning of the poorest families has risen steadily.

Average Is usually a dicey term, as it deals with extremes. So, cannot be sure of which section the option is speaking. Hence, Wrong.

B. The richest and poorest families have been known to change every two generations.

If this tide happens every two generations, then everyone is taxed and the wealth redistribution takes place in a cycled manner. Thus, the conclusion redistribution of wealth fails seems void and doesn’t hold any base. Thus, Correct weakening option.

C. Some extremely wealthy families are not so wealthy anymore.

After crossing the threshold, if you amass wealth 1000x times, you are taxed, and if u have just inherited 5x more than threshold also you are taxed. This comparative statement doesn’t make a difference, as both section is taxed and wealth redistribution occurs in the form taxes. Insufficient data. Hence, Wrong.

D. Tax is levied only upon those individuals owning assets over a certain level.

This is a factual statement made clear at the first paragraph itself. Hence, Wrong.

E. The poor families are aided by the governments in meeting their basic needs.

This option is about a welfare state and how it takes care of its citizens. Thus, out of context. Hence, Wrong.

Option B

3. Which of the following statements is least consistent with the passage?

A. Some European citizens have a reason to believe that there are three certainties in life.

The initial few lines mentions quoting Benjamin Franklins verse that  once they said  there are two uncertainties- death and taxes. Which means till now, two taxes existed. But, for few European residents, we can add tax till death as the third uncertainty. So, this is consistent.

B. Taxing the same amount twice is unfair.

At the beginning of the third para , these lines :

“  The cited problem with this ideology is that the money earned has been taxed throughout a person’s life, and so to  tax it again upon death is unfair  ”. This clearly shows that double taxation is unfair. Hence, Consistent.

C. The inheritance tax will always remain, despite its controversial nature.

The end of first paragraph mentions “  Even so, inheritance tax is likely to be sticking around for some time ”. Two things seems contradicting - one always remain, but the passage speaks about  likely  to remain ( probably remaining). Secondly, it doesn’t remain always, but only for  some time .

So, this option seems less consistent.

D. Inheritance tax can be reduced with sound financial planning.

This is explained in third paragraph among the lines - “   particularly affluent are anyway likely to have financial advisors in place who will have already found means to reduce the taxable amounts “. Which clearly explains without doubt that inheritance tax can be reduced. We are not concerned if it’s for the wealthy affluent or the poorer sections. Hence, Consistent. 
 
E. There was no inheritance tax in France before the French Revolution

It’s the French Revolution, which bought about the inheritance law to enable redistribution of wealth from rich to poor people. The second para - “   Inheritance tax was introduced in European countries in the 1790s and stemmed from the influence of the French Revolution “ is a perfect evidence to support French Revolution caused the genesis of Inheritance laws. Thus, Consistent.

Option C

ExpertsGlobal5 · Answer

Mind-map   
  
  To introduce that inheritance tax is controversial (Paragraph 1)  
  To explain the origin of and intention behind inheritance tax (Paragraph 2)  
  To suggest that inheritance tax defeats its purpose (Paragraph 3)  
  
  = = = = = = = = = =  
  
 1.   Which of the following best describes the usage of the term “the theoretical basis” (see highlighted text) in the context of the first paragraph?

a. To justify the collection of the inheritance tax when assets exceed a theoretical minimum threshold
b. To explain why the inheritance tax is likely to be sticking around
c. To question the basis of all tax collection
 d. To indicate doubt regarding the need for the inheritance tax 
e. To support the inheritance tax because it has a strong theoretical base

Question Type: Inference

D is the best choice.  
  
   Video explanation:

https://www.youtube.com/watch?v=-raVUe3_Aww

2. Which of the following, if true since the time inheritance tax was introduced, would most tend to weaken the conclusions drawn about the failure of the revolutionary vision (see highlighted text)?

a.   The average earning of the poorest families has risen steadily. 
  b.     The richest and poorest families have been known to change every two generations.  
 c.   Some extremely wealthy families are not so wealthy anymore. 
 d.   Tax is levied only upon those individuals owning assets over a certain level.  
 e.   The poor families are aided by the governments in meeting their basic needs.

Question Type: Inference

B is the best choice.   
  
    Video explanation:

https://www.youtube.com/watch?v=JIYs347Zq5Y

3.   Which of the following statements is least consistent with the passage?

a.   Some European citizens have a reason to believe that there are three certainties in life. 
 b.   Taxing the same amount twice is unfair. 
  c.     The inheritance tax will always remain, despite its controversial nature.  
 d.   Inheritance tax can be reduced with sound financial planning. 
 e.   There was no inheritance tax in France before the French Revolution.

Question Type: Fact

Explanation:

The information presented in the answer choices needs to be carefully evaluated.

A. The first paragraph states that “Benjamin Franklin once said that the only two certainties in life are death and taxes, and the residents of some European countries can add tax upon death to that list”; it can be inferred that some European citizens have a reason to believe that there are three certainties in life; because the answer choice is consistent with the passage, it is incorrect.

B. The third paragraph states that “The cited problem with this ideology is that the money earned has been taxed throughout a person’s life, and so to tax it again upon death is unfair”; clearly, the passage indicates that taxing the same amount twice is unfair; because the answer choice is consistent with the passage, it is incorrect.

C.  Correct.  The first paragraph states that the inheritance tax is “controversial” but “Even so, inheritance tax is likely to be sticking around for   some time  ”; although the passage says that the tax will be around for a while,   there is no indication that the tax will “always remain”  , as the answer choice states; clearly, the answer choice is not consistent with the passage and hence, it is the correct answer choice.

D. The third paragraph states that “the particularly affluent are anyway likely to have financial advisors in place who will have already found means to reduce the taxable amounts”; it can be inferred that inheritance tax can be reduced with sound financial planning; because the answer choice is consistent with the passage, it is incorrect.

E. The second paragraph mentions that “The French Revolution philosophy led to the perception of the then current French system as keeping the rich wealthy and poor excluded, as   money was simply handed down   to the already wealthy” and that this perception led to the   introduction of inheritance tax   in certain European countries; it can be inferred that there was no inheritance tax in France before the French Revolution; because the answer choice is consistent with the passage, it is incorrect.

C is the best choice.   
  = = = = = = = = = =

Benjamin Franklin once said that the only two certainties in life are

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Benjamin Franklin once said that the only two certainties in life are

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