GMAT Question of the Day:Critical Reaoning

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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32 Comments Post a Comment
  1. nakul_mukerjee says:

    E

  2. Rajnish says:

    Race is between

    B) a flat-tax system that allowed no deductions or exemptions would substantially increase actual government revenues

    E) the flat tax would actually be fairer to the lower-income taxpayer than any progressive tax system could be

    i think the ans is
    B

  3. anupam says:

    B
    E says could be.. doesnt sound convincing

  4. V Pat says:

    (E) the flat tax would actually be fairer to the lower-income taxpayer than any progressive tax system could be

    I think B is not the ans as govt. revenues is beyond the scope of our argument.

  5. gmatguru says:

    E it is …

  6. prasanthkara says:

    E is the answer…..In the paragraph, the flat tax proposal never mentioned any exemptions or anything only progressional tax did and also the govt’s profit is not under discussion.

  7. Ganapathy says:

    D

  8. Aspirant says:

    D

    I think E is not the answer since it goes too far in assuming that “all” progressive tax structure would be accompanied with tax benefits and thus not fairer than the “flat tax” system.

    D correctly limits the argument to the “present” progressive tax structure.

    Any comments?

  9. V Pat says:

    (D) the progressive nature of our present tax system is more illusory than real

  10. bluesclues9 says:

    D

  11. saurabh008 says:

    d

  12. mglo says:

    D

    Obviously it’s D, Answer E says “any progressive tax system.” Clearly one without loopholes or exemptions might work. D merely states that current progressive system discussed is more illusory than real in terms of the word “progressive.”

  13. Vineet says:

    D

    can we have the official answer please!

  14. bsol says:

    D, but at first I thought E

  15. Kofi DL says:

    D…

  16. rajat says:

    i think its E

  17. dp says:

    Option D

  18. Sung Park says:

    Naturally I picked “D” and I saw many wrote “E”. It is a long CR but easy.

  19. ismitevijay says:

    D:

  20. abhi says:

    I feel the answer is option D

  21. Aliva says:

    please explain why D???
    I picked E

  22. SB says:

    D it is, without doubt.

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