Events & Promotions
|
|
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
Track
Your Progress
Practice
Pays
Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.
Apr 2308:00 PM PDT
-09:00 PM PDT
Video explanations + diagnosis of 10 weakest areas + 150+ short videos + study plan!
Apr 2301:30 AM EDT
-02:30 AM EDT
Struggling with GMAT Verbal as a non-native speaker? Harsh improved his score from 595 to 695 in just 45 days—and scored a 99 %ile in Verbal (V88)! Learn how smart strategy, clarity, and guided prep helped him gain 100 points.
Apr 2512:30 AM EDT
-01:30 AM EDT
At one point, she believed GMAT wasn’t for her. After scoring 595, self-doubt crept in and she questioned her potential. But instead of quitting, she made the right strategic changes. The result? A remarkable comeback to 695. Check out how Saakshi did it.
Apr 2610:00 AM EDT
-11:00 AM EDT
The Target Test Prep course represents a quantum leap forward in GMAT preparation, a radical reinterpretation of the way that students should study. Try before you buy with a 5-day, full-access trial of the course for FREE!
Apr 2711:00 AM EDT
-12:00 PM EDT
Prefer video-based learning? The Target Test Prep OnDemand course is a one-of-a-kind video masterclass featuring 400 hours of lecture-style teaching by Scott Woodbury-Stewart, founder of Target Test Prep and one of the most accomplished GMAT instructors
Apr 2808:00 AM PDT
-11:00 AM PDT
Whether you are just beginning your MBA journey or fine-tuning your path to a 700+ score, GMAT Day is designed to give you a competitive edge.
01 Aug 2023, 12:00
Kudos
Bookmarks
B
Be sure to select an answer first to save it in the Error Log before revealing the correct answer (OA)!
Difficulty:
25%
(medium)
Question Stats:
77% (01:17) correct
23%
(01:40)
wrong
based on 1205
sessions
History
Date
Time
Result
Not Attempted Yet
Economist: Sales taxes do not provide a fair alternative to income taxes. Low-income households must spend nearly all of their disposable income on consumption items they need to live, while high-income households can afford to buy those items and then put a substantial amount of their earnings into savings. Hence a sales tax
Which of the following most logically completes the argument?
A. could result in households with different incomes paying different amounts of taxes
B. could tax a smaller percentage of the earnings of high-income households than of low-income households
C. would put a disproportionately high burden on the purchasers of the most expensive consumption items
D. should be applied only to the wealthiest households
E. should not be used to tax any consumption items
Which of the following most logically completes the argument?
A. could result in households with different incomes paying different amounts of taxes
B. could tax a smaller percentage of the earnings of high-income households than of low-income households
C. would put a disproportionately high burden on the purchasers of the most expensive consumption items
D. should be applied only to the wealthiest households
E. should not be used to tax any consumption items
Using official mocks already?
Add GMAT Club Tests for harder practice, analytics, and explanations without overlapping Official Guide or official mock questions.
Try it now →
17 Aug 2023, 12:38
Kudos
Bookmarks
Economist: Sales taxes do not provide a fair alternative to income taxes. Low-income households must spend nearly all of their disposable income on consumption items they need to live, while high-income households can afford to buy those items and then put a substantial amount of their earnings into savings. Hence a sales tax
Which of the following most logically completes the argument?
"Hence" has a meaning similar to "therefore." So, the last sentence of the passage must state a conclusion that follows from the statements that precede it.
A. could result in households with different incomes paying different amounts of taxes
This choice states the opposite of what logically follows from the passage. After all, the passage says that low-income households spend on "consumption items" and that high-income households "buy those items," meaning the same items.
If people buy the same items, they will pay similar amounts of sales taxes. So, the information in the passage indicates that a sales tax could result in households with different incomes paying similar amounts of taxes.
A statement that is the opposite of what follows from the passage cannot be a conclusion that follows from the passage.
Eliminate.
B. could tax a smaller percentage of the earnings of high-income households than of low-income households
The passage says the following:
Low-income households must spend nearly all of their disposable income on consumption items they need to live, while high-income households can afford to buy those items and then put a substantial amount of their earnings into savings.
Notice that that information indicates that low-income households and high-income households buy the same items and thus pay similar amounts of sales taxes.
At the same time, by definition, high-income households have more earnings than low-income households. So, the same amount of sales taxes will be a smaller percentage of the earnings of high-income households than it is of the earnings of low income households.
Thus, this choice follows directly from what the passages says.
Keep.
C. would put a disproportionately high burden on the purchasers of the most expensive consumption items
The passage says nothing about "the purchasers of the most expensive consumption items." So, this choice already doesn't seem to follow from the passage.
Meanwhile, what the passage says indicates that sales taxes put a disproportionately high burden on low-income households, which presumably are not purchasers of the most expensive consumption items. So, this choice says basically the opposite of what the passage says.
Eliminate.
D. should be applied only to the wealthiest households
The passage indicates that, since high income households and low income households pay sales tax on the same "consumption items," "sales taxes do not provide a fair alternative to income taxes."
That information does not support taking any specific course of action, such as applying sales taxes to only the wealthiest households. It's just information indicating that the outcome of using sales taxes is not fair
Eliminate.
E. should not be used to tax any consumption items
The passage indicates that, since high income households and low income households pay sales tax on the same "consumption items," "sales taxes do not provide a fair alternative to income taxes."
Notice that "do not provide a fair alternative to income taxes" is not the same as "should not be used to tax any consumption items." After all, there could be situations in which sales taxes are applied to certain consumption items without being an "alternative to income taxes." For instance, a sale tax could be used to tax only fuel use for the purpose of paying for road maintenance.
So, this choice does not follow from the passage.
Eliminate.
The correct answer is (B).
Which of the following most logically completes the argument?
"Hence" has a meaning similar to "therefore." So, the last sentence of the passage must state a conclusion that follows from the statements that precede it.
A. could result in households with different incomes paying different amounts of taxes
This choice states the opposite of what logically follows from the passage. After all, the passage says that low-income households spend on "consumption items" and that high-income households "buy those items," meaning the same items.
If people buy the same items, they will pay similar amounts of sales taxes. So, the information in the passage indicates that a sales tax could result in households with different incomes paying similar amounts of taxes.
A statement that is the opposite of what follows from the passage cannot be a conclusion that follows from the passage.
Eliminate.
B. could tax a smaller percentage of the earnings of high-income households than of low-income households
The passage says the following:
Low-income households must spend nearly all of their disposable income on consumption items they need to live, while high-income households can afford to buy those items and then put a substantial amount of their earnings into savings.
Notice that that information indicates that low-income households and high-income households buy the same items and thus pay similar amounts of sales taxes.
At the same time, by definition, high-income households have more earnings than low-income households. So, the same amount of sales taxes will be a smaller percentage of the earnings of high-income households than it is of the earnings of low income households.
Thus, this choice follows directly from what the passages says.
Keep.
C. would put a disproportionately high burden on the purchasers of the most expensive consumption items
The passage says nothing about "the purchasers of the most expensive consumption items." So, this choice already doesn't seem to follow from the passage.
Meanwhile, what the passage says indicates that sales taxes put a disproportionately high burden on low-income households, which presumably are not purchasers of the most expensive consumption items. So, this choice says basically the opposite of what the passage says.
Eliminate.
D. should be applied only to the wealthiest households
The passage indicates that, since high income households and low income households pay sales tax on the same "consumption items," "sales taxes do not provide a fair alternative to income taxes."
That information does not support taking any specific course of action, such as applying sales taxes to only the wealthiest households. It's just information indicating that the outcome of using sales taxes is not fair
Eliminate.
E. should not be used to tax any consumption items
The passage indicates that, since high income households and low income households pay sales tax on the same "consumption items," "sales taxes do not provide a fair alternative to income taxes."
Notice that "do not provide a fair alternative to income taxes" is not the same as "should not be used to tax any consumption items." After all, there could be situations in which sales taxes are applied to certain consumption items without being an "alternative to income taxes." For instance, a sale tax could be used to tax only fuel use for the purpose of paying for road maintenance.
So, this choice does not follow from the passage.
Eliminate.
The correct answer is (B).
01 Aug 2023, 13:21
Kudos
Bookmarks
Bunuel
The Story: The Economist is of the opinion that sales tax does not provide a fair alternative to income tax. Put otherwise the Economist feels that income tax is more fair than sales tax.
Reasoning: For the purchase of the same goods, individuals from low-income households must spend a greater share of their income than that of individuals from high-income households.
We have to complete the passage -
A. could result in households with different incomes paying different amounts of taxes
Not really! Whether an individual belongs to a high-income household or a low-income household, one has to pay the same tax. This is the very reason, the Economist feels that sales tax is not fair. Hence, we can eliminate this option.
B. could tax a smaller percentage of the earnings of high-income households than of low-income households
The statement is in line with the Economist's argument and can act as a conclusion to the argument. An individual from a low-income household ends up paying an amount that constitutes a higher percentage of his / her household income than that of an income of an individual from a high-income household.
C. would put a disproportionately high burden on the purchasers of the most expensive consumption items
The argument revolves around the burden of individuals from the low-income household. In fact, the crux of the argument is that sale tax is a higher burden to individuals of low-income households than to individuals of high-income households. Eliminate.
D. should be applied only to the wealthiest households
The argument doesn't conclude or hint towards this. We can eliminate this.
E. should not be used to tax any consumption items
The argument doesn't conclude or hint towards this. We can eliminate this.
Option B
