The dollar amount of federal tax revenues gained from personal income

Question

The dollar amount of federal tax revenues gained from personal income tax has increased markedly in recent years. Clearly, people are being more honest in declaring their annual earnings than they used to be.

The argument above would be greatly weakened by each of the following EXCEPT:
 
 Fewer income tax deductions are allowed now than in the past.
 
 The nation's population has increased.
 
 Tax revenue from the corporate sector has decreased.
 
 The average yearly income of the nation's resident has increased.
 
 The rate of personal income taxation has increased.

NightsKing · Answer

I understand why the right answer is right; but I don't understand why some of the wrong answers are wrong!!

dominicraj · Answer

Hi Nightking,

Arguement: Tax Revenue increased hence more people are declaring annual earnings.

First lets find which all options weaken the arguement/which are possible genuine reasons for the increased earnings:

Fewer income tax deductions are allowed now than in the past.- Fewer deducations allowed hence tax has increased-sounds good can be a possible reason

The nation's population has increased.- More people means more tax though may not be markedly-sounds good can be a possible reason

Tax revenue from the corporate sector has decreased.-If tax revenue from corporate sector decreased then something else contributed to the tax increase- hold it

The average yearly income of the nation's resident has increased.- sounds good can be a possible reason

The rate of personal income taxation has increased.- sounds good can be a possible reason

Only option C does not serve as an alternative reason for the increased tax revenues instead of the claim of "people being honest". Hence its the best among the rest.

Regards,
Dom.

Patronus · Answer

Hi NightsKing, This is my understanding, hope it helps

: A) Fewer income tax deductions are allowed now than in the past. Fewer tax deductions = more money is made by individuals = more money given to Fed B) The nation's population has increased. Population increase = more people giving money than earlier to Fed C) Tax revenue from the corporate sector has decreased. Corporate sector? We are talking about "personal income tax". Out of Scope D) The average yearly income of the nation's resident has increased. Average increase in income = more money given by people to Fed E) The rate of personal income taxation has increased. Income tax increased = more money forcibly taken away by Fed

Bunuel · Answer

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anupamadw · Answer

Hi 
Please help me to understand meaning of A and C
 A Fewer income tax deductions are allowed now than in the past.
 C Tax revenue from the corporate sector has decreased.

rohan89 · Answer

A- if you earn 1,00,000 pa, and taxable is 10,000. Then after the fewer income tax deductions allowed, the taxable amount being increased to 20,000 will result in paying more tax. This says that the citizens are not honest, the tax structure makes them pay more tax.

C- This is not a strengthener. This sentence is neutral. It is simple to pick this option as the answer because the argument is discussing about the citizens or individual tax payers, and this option shifts the focus on corporate sector, which is exactly what we are looking for.

Hope that answers your question.

Thanks,
Rohan

anupamadw · Answer

Sorry still A is not clear.
 if you earn 1,00,000 pa, and taxable is 10,000.  Then after the fewer income tax deductions allowed,  the taxable amount being increased to 20,000 will result in paying more tax. This says that the citizens are not honest, the tax structure makes them pay more tax.

How taxable amount will increase after fewer tax deductions?
IMO It is "fewer" so countable type of tax deductions , may be there were P,Q,R,S 4 taxes applied 
now fewer tax deductions means only P and Q are applied in that case tax amount will reduce.
I am missing something, which I want to know.
I selected A becoz !

rohan89 · Answer

Sorry still A is not clear.
if you earn 1,00,000 pa, and taxable is 10,000. Then after the fewer income tax deductions allowed, the taxable amount being increased to 20,000 will result in paying more tax. This says that the citizens are not honest, the tax structure makes them pay more tax.

How taxable amount will increase after fewer tax deductions?
IMO It is "fewer" so countable type of tax deductions , may be there were P,Q,R,S 4 taxes applied
now fewer tax deductions means only P and Q are applied in that case tax amount will reduce.
I am missing something, which I want to know.
I selected A becoz ![/quote]

I might have complicated that a bit.

Just understand that 'fewer income tx deductions allowed' means the income which you get to show as NON taxable is reduced. Generally speaking, If you show more expenses in your salary, then only the remainder part of your salary is taxable. You tell the govt not to cut your income tax( based on all the expenses)- that is termed as 'tax deductions'. And this amount(which you can show as expenses) has been reduced by the govt, which means you have to pay more tax. This is what the author implies.

Sorry for being so complicated. :-D

Hope this clears your doubt. If this still doesn't solve your doubt, then please send a PM, i will give you a still better explanation

Hope this clears your doubt. If this still doesn't solve your doubt, then please send a PM, i will give you a still better explanation

sarthakgupta685 · Answer

hi,

what's the conclusion here ?

TIA

VerbalBot · Answer

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The dollar amount of federal tax revenues gained from personal income

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The dollar amount of federal tax revenues gained from personal income

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