CR: Population and Tax

[750GO]

When a city experiences a sharp decline in population, the city's tax revenues, which pay for such city services as police protection and maintenance of water lines, also decrease. The area to be policed and the number and length of the water lines to be maintained, however, do not decrease. Attempting to make up the tax revenue lost by raising tax rates is not feasible, since higher tax rates would cause even more residents to leave.
The information given most strongly supports which of the following general claims?
A. If, in a city with sharply declining population, police protection and water line maintenance do not deteriorate, some other service previously provided by the city will deteriorate or be eliminated.
B. If a city's tax rates are held stable over a period of time, neither the population nor the levels of city services provided will tend to decline over that period.
C. If a city's population declines sharply, police protection and water line maintenance are the services that deteriorate most immediately and most markedly.
D. A city that suffers revenue losses because of a sharp decline in population can make up some of the lost tax revenue by raising tax rates, provided the city's tax rates are low in relation to those of other cities.
E. A city that is losing residents because tax rates are perceived as too high by those residents can reverse this population trend by bringing its tax rates down to a more moderate level.

The OA is A.
My question: I chose E at the first time, and then realized that even if the city brings back its low tax rates, the previous population does not necessarily reverse since the people may have other reason not to back to the city.
But A is not a good answer to me, either. The argument just mentions that the Government cannot raise the lost tax revenue via increasing the tax rates, but it never rules out other ways for the government to regain its tax revenue( after all, tax is not the only constitute of the government's revenue) So maybe the government regain its revenue from other methods and does not have to eliminate any services.

hmm...am i overthinking?
Pls help me! thanks in advance!

[PFWinkler]

First – look at the question stem. Ok, we see ‘most strongly supports a general claim’…this is fairly direct in terms of what we want to understand when we are reading a CR question stem.

Here is what I see/thought about when reading this

 Decline in tax revenues, equates to a decline in city services…however, we don’t know which ones…
 Understanding the second sentence is critical, as it tells us that policed areas, and the water maintenance will NOT see a decline in city services…ie: they are essential – understanding this part is KEY
 Raising taxes to aid the short fall will just make additional people leave, ie: city tax revenues will decline THAT much more

Looking at the answers:

B = Not relevant.
C = Not true from the passage above
D = Not relevant/out of scope
E = IT’s unclear if this city has high taxes in the FIRST place…you can’t assume that

That means you are left with A…which makes sense, since we know 1) Police protection and water maintenance are essential and 2) Other services provided WILL be cut/eliminated, when tax revenues decline

[RonPurewal]

The argument just mentions that the Government cannot raise the lost tax revenue via increasing the tax rates, but it never rules out other ways for the government to regain its tax revenue( after all, tax is not the only constitute of the government's revenue)

government revenue = taxes. where else do you think the government is going to get money?

[750GO]

The argument just mentions that the Government cannot raise the lost tax revenue via increasing the tax rates, but it never rules out other ways for the government to regain its tax revenue( after all, tax is not the only constitute of the government's revenue)

government revenue = taxes. where else do you think the government is going to get money?

Well, in China, the government can sell (or rent) its land to real estate industry to increse its revenue. I am not sure whether this kind of channel to get money is a kind of tax...
Maybe I am lost in some economic conceptions here.

[RonPurewal]

well, even if you do postulate the existence such alternate government revenue streams, there's no reason to think those revenues could be increased (by pure magic!).

in fact, if the extra revenue sources come from rent or real estate, then, with a sharply declining population, THOSE sources of revenue would almost certainly be plummeting, too! (that's what happens when everyone leaves town...)

so, ironically, your hypothetical situation just provides even MORE evidence for choice A.

[RonPurewal]

...besides, remember, you have to throw your weight behind one of the answers!
you can't just say "i don't like any of these answers". if you claim that one answer is INCORRECT, you have to be prepared to select ANOTHER answer as CORRECT!

this goes especially for the official problems, all of which have been meticulously edited, and NONE of which will have five unattractive answer choices.
really.
if you "don't like any of the choices" for one of GMAC's problems, then that means YOU have to change how you're viewing the problem. it definitely does not mean something is wrong with the problem.

[Giuseppe853]

When a city experiences a sharp decline in population, the city's tax revenues, which pay for such city services as police protection and maintenance of water lines, also decrease. The area to be policed and the number and length of the water lines to be maintained, however, do not decrease. Attempting to make up the tax revenue lost by raising tax rates is not feasible, since higher tax rates would cause even more residents to leave.

The information given most strongly supports which of the following general claims?


D. A city that suffers revenue losses because of a sharp decline in population can make up some of the lost tax revenue by raising tax rates, provided the city's tax rates are low in relation to those of other cities.

Hello Ron and other moderators,
I'm still not completely sure I can eliminate answer D. Following is my reasoning:

The passage said that making up the lost revenue by increasing taxes is not possible because this will involve people to leave from the city, but common sense says that they have to pay taxes anywhere they go.
Since the increase in taxes proposed in D makes the local taxes still lower compared to other cities, people won't leave the city (at least because of taxes).
Therefore, increasing taxes by a small amount is still a way to make up the lost tax revenue.

What is wrong in this line of reasoning?

Also, does "make up" have a similar meaning to "markup" ?

Thanks in advance,

[jabgt]

Hello Ron and other moderators,
I'm still not completely sure I can eliminate answer D. Following is my reasoning:

The passage said that making up the lost revenue by increasing taxes is not possible because this will involve people to leave from the city, but common sense says that they have to pay taxes anywhere they go.
Since the increase in taxes proposed in D makes the local taxes still lower compared to other cities, people won't leave the city (at least because of taxes).
Therefore, increasing taxes by a small amount is still a way to make up the lost tax revenue.

What is wrong in this line of reasoning?

Also, does "make up" have a similar meaning to "markup" ?

Thanks in advance,

Hi Giuseppe853,

Sorry that I jump in and that I'm not one of the experts you look for.

But what Choice D says is on the contrary to what states as a fact in the prompt "Attempting to make up the tax revenue lost by raising tax rates is not feasible" Even though the raised tax rates are still low comparable to those of other cities, this does not affect the fact that people will leave because of the raised tax rates.
(You cannot rule out the possibilities such as some cities have further lower tax rates to attract people to move into or the city mentioned has no other advantage to retain its residents other than its relatively low tax rates. But please don't get me wrong -- you definitely don't need these assumptions to eliminate Choice D. Ron has already taught us not to make random assumptions to argue for or against. I list these possibilities here just to show that given the city's tax rates relatively low this new condition in Choice D doesn't help.)

Hope this helps, otherwise our beloved experts will help us out.

[jabgt]

Dear Experts,

Can I confirm my below understanding regarding choice B? Thank you! (Dear Experts, I'm good now. But since I cannot delete my post or leave my post blank, I keep it as it was.)

The former part"If a city's tax rates are held stable over a period of time, the population will not tend to decline over that period" is correct, while the latter part "If a city's tax rates are held stable over a period of time, the levels of city service will not tend to decline over that period." is wrong. Because this is not necessarily true to infer from the question prompt, there are other things than tax rates can cause city service to decline.

(from prompt, we get formal logic "decline in population" --> "decline in tax revenue" --> "decline in payment of city services"; then the former part of Choice B is a valid contrapositive, while the latter part of Choice B is an invalid mistaken negation.)

[RonPurewal]

The former part"If a city's tax rates are held stable over a period of time, the population will not tend to decline over that period" is correct

^^ hm? no...

first, you can eliminate this choice just by pure common sense: it's a totally ridiculous statement in the real world. (obviously, just keeping tax rates constant isn't going to stop people from moving out of a city!).
remember, NEVER pick answer choices that are absurd in real life!

beyond that, the passage gives no support to this idea.
in fact, the passage supports the idea that population declines can just happen -- without ANY meaningful relation to tax rates. (the passage starts with "When a city experiences a sharp decline in population..." -- thus implying this is something that can just occur, without regard to what tax rates are doing at the time.)

[Everything OR Nothing]

why D is wrong.

statement in argument says raising tax is not possible as people will leave to other cities.

If other cities do have higher taxes why people will leave this city even if this city marginally raises tax (keeping below other cities)


I do not know why we have to put all weight for A but not for D

I remember Ron saying: we must relate arguments to real world also sometimes.Well real world will say D is way better than A

[RonPurewal]

in THIS specific problem, your assignment is to PROVE one of the answer choices.

THIS is not a task in which you can invoke random outside knowledge.
in THIS kind of problem (...and only in this kind of problem), you're basically restricted to the logical universe of the given statements (and whatever can be rigorously deduced from them).

[RichaChampion]

OA is A

The Options B, C, and D can be easily eliminated.

I think the process to eliminate E should be like this -

Attempting to make up the tax revenue lost by raising tax rates is not feasible since higher tax rates would cause even more residents to leave.

causal argument = Increase the Tax revenue by increasing tax will cause more populating decline.

X, THEREFORE Y situation.
But what E is trying to say IS

Y, THEREFORE X


This can't be true. Is my approach correct?
In Inference question, if the stimulus has given X, THEREFORE Y then we can't infer.
Y, THEREFORE X.

I also feel that Option A is not the best option, but the last devil.

(A) If in a city with a sharply declining population, police protection and water line maintenance do not deteriorate, some other service previously provided by the city will deteriorate or be eliminated.

The Part in red doesn't make this a completely perfect answer, but the least devil. We can't actually deduce the part in red because in that we will be governed by the real world thinking. because the part in red is actually a real world thinking, but not something that is explicitly stated in the stimulus. Please verify if my thinking is correct?

[RonPurewal]

this problem is asking you to PROVE one of the answer choices, USING the given statements.

choice E should be a quick elimination, because choice E deals with a situation that is completely unrelated to anything described in any of the existing statements.
i.e., choice E describes a situation in which people CURRENTLY PERCEIVE tax rates as "too high". none of the existing choices deals with any such situation.

__

[RonPurewal]

We can't actually deduce the part in red because in that we will be governed by the real world thinking. because the part in red is actually a real world thinking, but not something that is explicitly stated in the stimulus

the given statements tell us that, with a smaller population, there will be less tax money available. if we spend the SAME amount of tax money on policing and water-line maintenance, then, less tax revenue will be available for everything else.

this implies choice A.