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Which of the following best completes the passage below? One

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Which of the following best completes the passage below? One [#permalink]

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02 Jun 2006, 07:22
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Which of the following best completes the passage below?

One tax-reform proposal that has gained increasing support in recent years is the flat tax, which would impose a uniform tax rate on incomes at every level. Opponents of the flat tax say that a progressive tax system, which levies a higher rate of taxes on higher-income taxpayers, is fairer, placing the greater burden on those better able to bear it. However, the present crazy quilt of tax deductions, exemptions, credits, and loopholes benefits primarily the high-income taxpayer, who is consequently able to reduce his or her effective tax rate, often to a level below that paid by the lower-income taxpayer. Therefore, ______

(A) higher-income taxpayers are likely to lend their support to the flat-tax proposal now being considered by Congress
(B) a flat-tax system that allowed no deductions or exemptions would substantially increase actual government revenues
(C) the lower-income taxpayer might well be penalized by the institution of a flat-tax system in this country
(D) the progressive nature of our present tax system is more illusory than real
(E) the flat tax would actually be fairer to the lower-income taxpayer than any progressive tax system could be
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02 Jun 2006, 09:53
Only ones that come close are B and D.

B cannot be justified from the argument. The govt revenues may increase. But - substantially increase? No certaintly.

D - Sums up the argument nicely.

C - Nope
E - Cannot be concluded from the stem.
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02 Jun 2006, 11:04
I am for D too...
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02 Jun 2006, 12:30
I will go for D...
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02 Jun 2006, 16:46
D ...
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Re: CR : tax system [#permalink]

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02 Jun 2006, 16:59
A) is wrong - those who're not going to get benefited by a proposal are not going to support it.
B) Govt revenues depend upon what the rate of the flat tax. False.
C) There's nothing in the passage to prove this. False.
D) This is proved in the passage, that the rate at higher income levels can sometimes be brought lower than that at the lower income levels. This still does not prove that the progressive tax system is totally illusionary - the person at higher income pays more tax still. For example, at income of $100,000, someone pays$20,000 as taxes annually, at 20%, while someone at $50000 income pays$12500 as taxes. at 25%.
E. The passage actually has the central point that the current system is not fair to the lower income people. The point about higher income ppl paying lower tax rate was brought in just to prove this, and to prove that the current, unfair system can lead to lower income person paying a higher tax rate than a person with higher income.

Thus the passage should logically terminate by advocating the newer flat tax system, rather than accusing the older tax system.

I'd go by E.
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04 Jun 2006, 13:27
I go for E.. but the OA is D.. please explain!
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05 Jun 2006, 04:00
Will go with D
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05 Jun 2006, 08:59
D it is.
05 Jun 2006, 08:59
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