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CAT Critical Reasoning Practice question with Solution 80

With the passage of the new tax reform law the annual tax burden on low-income taxpayers will be reduced, on average, by anywhere from $100 to $300. Clearly, tax reform is in the interest of low-income taxpayers.

Which one of the following, if true, most undermines the conclusion above?

[A]. Tax reform, by simplifying the tax code will save many people the expense of having an accountant do their taxes.
[B]. Tax reform, by eliminating tax incentives to build rental housing, will push up rents an average of about $40 per month for low-income taxpayers.
[C]. Low-income taxpayers have consistently voted for those political candidates who are strong advocates of tax reform.
[D]. The new tax reform laws will permit low and middle-income taxpayers to deduct Child-care expenses from their taxes.
[E]. Under the new tax reform laws, many low-income taxpayers who now pay taxes will no Longer be required to do so.
Answer: B

Sound too good to be true? In real life, our natural skepticism would lead us to ask: “Okay, what’s the catch?” And the question stem straight out tells us to be suspicious— we’re asked to weaken the conclusion that this tax reform is good for the low income folks.

Well, everyone knows that if you save money in one area but lose more money in another, the overall transaction is a bust. And that’s the result set in motion by choice (B): A lowincome taxpayer who saves $100 to $300 a year, but has to pay roughly $40 per month, or $480 a year, in additional rent, certainly isn’t benefiting from the tax reform. Based on one positive effect of tax reform, the author concludes that tax reform will have an overall positive effect on low-income taxpayers. However, if (B) is true, the tax reform no longer looks like such a good deal.

(A) could only strengthen the argument, since saving some taxpayers the expense of hiring an accountant would make the new tax reform seem like a positive development. However, (A) fails even as a strengthener, since the argument concerns the interests of lowincome taxpayers, whereas (A) would apply to all taxpayers.

(C) So what? This choice in no way suggests that tax reform isn’t in the interest of lowincome taxpayers.

(D) and (E) both strengthen the argument. Allowing low-income taxpayers to take a deduction on child-care expenses (D), or releasing them altogether from the obligation to pay taxes (E) are certainly benefits to those taxpayers.

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