The deficit is the difference between the amount that the government

Question

The deficit is the difference between the amount that the government taxes in as revenue and the amount that it spends in a given year. There are only two ways to cut the deficit: raise revenue or cut spending. The current government has carried out all possible efforts to cut spending without any significant effect on the deficit. It then follows that the deficit will remain at the current level for a few years since _________________

Which of the following best completes the passage?

A. No practical means currently exist to raise revenues.

B. The economy is stagnant and does not allow for any more industrial spending.

C. The government has to comply to international limits placed on its export contacts

D. The government is against increasing the tax burden on its citizens

E. The government is currently focusing on internal revenue management

This is a  CR Butler Question

Check the links to other Butler Projects: 
 
   Data Sufficiency Butler 
   Problem Solving Butler  
   Sentence Correction Butler  
   Reading Comprehension Butler  
   Integrated Reasoning Butler

psyke119 · Answer

Options A and D both point towards not being able to raise tax revenue. I'm confused between A and D.

shravansudden · Answer

Deficit = Spending - Tax Revenue
Spending has been cut, implying the deficit should reduce.
Spending cut without any effect on deficit --> reduced Tax Revenue
the only option that's close to mentioning about reduced tax revenue is option E, internal revenue management

Braintree · Answer

The deficit is the difference between the amount that the government taxes in as revenue and the amount that it spends in a given year. There are only two ways to cut the deficit: raise revenue or cut spending. The current government has carried out all possible efforts to cut spending without any significant effect on the deficit. It then follows that the deficit will remain at the current level for a few years since _________________

Which of the following best completes the passage?

A. No practical means currently exist to raise revenues.

B. The economy is stagnant and does not allow for any more industrial spending.

C. The government has to comply to international limits placed on its export contacts

D. The government is against increasing the tax burden on its citizens

E. The government is currently focusing on internal revenue management

Note that A is more airtight than D. The key sentence is “ There are only two ways to cut the deficit: raise revenue or cut spending”. Answer choice A directly addresses that there is no way to raise Revenues. Answer choice D on the other hand keeps a few backdoors open - such as the restricting word ‘citizens’. What if the government can raise revenues through exports to other countries? In that case the tax burden would not be on it’s own citizens.

bt

gmatophobia · Answer

I have a different opinion on this

Let's see the conclusion of the argument. Conclusion : The deficit will remain at the current level for a few years We have to give support to the conclusion. Let's look at A : No practical means currently exist to raise revenues. There are two issues, I think - First the statement talks about practical means. It doesn't tell there are no means, but tells that the means are not practical. Second is the use of the word currently. If something doesn't exists currently doesn't mean it can't exist in future ( we are talking about few years, and not immediate). Let's look at D : The government is against increasing the tax burden on its citizens Say if the government were to increase taxes, then the deficit would go down. We already know that the spendings have been curbed to whatever extent possible, so one of the two factors have been taken care of. This option rules out any alternate possibility. Hence this statement lends support. IMO D I would like to address one last point in your method of reasoning - If the revenues are raised through other means the conclusion falls apart. It means the deficit will reduce (as the spendings are already curbed to the lowest possible). Hence we can't assume something that defies the conclusion as we need to support the same. Would like to hear your thoughts

Braintree · Answer

Interesting counterpoint, gmatophobia . Thanks

First, regarding: What I mean here is raising revenues through taxing citizens of other countries through domestic exports (customs) or through say Foreign direct investments etc. (a lot of the taxes that the government receives are not from its own citizens). The premises, just talks about 'taxes' and not 'taxes from its own citizens', whereas Answer choice D specifically talks about taxes from its citizens. Note that the word 'burden' in Answer choice D is also limiting - since the burden of taxes shift all the time (that is why the word "INDIRECT" in 'indirect taxes' - because they shift the burden to someone else - in this case, say a non-citizen.) Getting that out of the way, now lets focus on whether A or whether D is more airtight: I do agree that 'currently' in statement A is vague. (I wouldn't take too much stock in the word "Practical", since what is "impractical", by definition cannot be practiced or implemented). So given that both these statements keep loopholes open, we may have to consider their respective degree of 'airtightness'

. In such a case, I prefer Statement A over Statement D, since given the following chain of logic: Increased Taxes -> Increased Revenues. Statement A directly addresses the end link of the chain of logic, and therefore avoids any other possible seepages.

Cheers, bt

divyadna · Answer

Posted from my mobile device

Braintree · Answer

I followed same thought process.

Our conclusion is : The deficit will remain at the current level for a few years
Premise is : - All possible efforts to cut spending is done

Option D The government is against increasing the tax burden on its citizens : Dosen't give answer to if increased tax would have imposed on citizen , would it have sufficient to reduce deficit ?...We don't know....Also increasing tax burden IS means of Increasing Revenue ...comes with out of knowledge,Which generally in GMAT exam don't have to apply....so we should be more rely on Premise already given

So, A will be best choice.

Lets wait for official OA revelation

Tbh, I’d not lose much sleep over this. Do non-official questions for practice, but develop your concepts and ‘takeaways’ only from official questions. Or if you really need to, then develop concepts from non-official questions that are vetted by (replied by) reputed experts.

Posted from my mobile device[/quote]

Posted from my mobile device

Braintree · Answer

Tbh, I’d not lose much sleep over this. Do non-official questions for practice, but develop your concepts and ‘takeaways’ only from official questions. Or if you really need to, then develop concepts from non-official questions that are vetted by (replied by) reputed experts.

Posted from my mobile device[/quote]

Posted from my mobile device

winterschool · Answer

Isn't A is extreme? the first line of the argument states that the government taxes in as revenue

There are no ways or only......- most of the time these express extreme cases

Braintree · Answer

It's risky to rely on such heuristics to solve CR questions (or any GMAT question, for that matter).

In this case, for example, we are looking for a statement that eliminates the possibility that the government can increase its revenues. Thus, the more 'extreme' that an answer choice is to eliminate this possibility, the better it is. Rather, the whole discussion above is that Answer choices A and D are not as extreme as are needed - that they don't go all the way to eliminate the possibility that the government CAN increase its revenues (because of the word 'current', for example, in Answer Choice A, and the word 'citizens' in Answer Choice D).

bt

KarishmaB · Answer

We are concluding about the next few years.

A. No practical means currently exist to raise revenues.

Option (A) talks about the current situation. It needed to add '... and any new method takes a few years to become practical' or something like that. We can't give an outlook for a few years based on option (A) as given originally.

D. The government is against increasing the tax burden on its citizens

The Govt could increase tax on foreign set ups in the country or on residents who are not citizens yet etc. Also we don't know how long the current Govt will be in power. If elections are to be help later this year, we may not be able to say what will happen in a few years. Also, even if the Govt is against increasing tax burden today, after some days it may change its mind due to some political pressures. Hence, giving an outlook for a few years based on option (D) is not very meaningful.

Divijakanneganty · Answer

The deficit is the difference between the amount that the government taxes in as revenue and the amount that it spends in a given year. There are only two ways to cut the deficit: raise revenue or cut spending. The current government has carried out all possible efforts to cut spending without any significant effect on the deficit. It then follows that the deficit will remain at the current level for a few years since _________________

Which of the following best completes the passage?

A. No practical means currently exist to raise revenues.

B. The economy is stagnant and does not allow for any more industrial spending.

C. The government has to comply to international limits placed on its export contacts

D. The government is against increasing the tax burden on its citizens

E. The government is currently focusing on internal revenue management

Between A & D. I believe A is a better option. 
The deficit will remain at current levels for a few years...because currently there are no practical means to adjust revenues. Even if there are any other theoretical means or anything of such sort, they are useless unless they can be put into practice. Hence this is an objective assumption. 
Also, the word "Currently" ties the scope to future as well...by implicitly stating that the current situation may change in this future.

Also, Option D is a bit subjective assumption which cannot be readily assumed especially when you already have an objective assumption.

adichat2711 · Answer

The government and few years to come can’t be said together. You don’t know if this is the last year for the current govt and the next govt is also anti tax increase. If that happens then option D falls apart as it doesnt matter what the current govt thinks.

The deficit is the difference between the amount that the government

Prep Toolkit

Top 5 GMAT Debrief Videos

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards

GMAT Critical Reasoning (CR) Questions

The deficit is the difference between the amount that the government

Prep Toolkit

615 to 715 in 15 Days (Ria's Strategies)

More than Quant/Verbal Abilities: Speed vs. Accuracy

745 with Only Self-Prep and GMAT Club

From 555 to 765: 210-point Improvement

Perfect 805 Score Debrief by Julia

My Rewards