PrepTest 105, Section 4, Question 14
Citizen: Our legislators need to act quickly to(53 more words not shown)
The citizen's argument depends on(3 more words not shown)
- Athe recession in(10 more words not shown)
- Bthe greater the(22 more words not shown)
- Cupper-income citizens have(9 more words not shown)
- Dupper-income citizens would(13 more words not shown)
- Ein the past,(13 more words not shown)
Reading the argument
How does cutting these taxes solve the unemployment problem? The citizen's answer is a chain: a tax cut leads to more investment, and that investment creates jobs. That's the proposed benefit. We should still ask whether it makes the policy worth adopting.
What if the lost tax revenue pays for important social programs? Creating jobs would be a benefit, but it wouldn't automatically settle every other consideration. I would want to know whether giving up that revenue creates a serious problem of its own.
What we’re looking for
We're asked for an assumption the argument needs. My initial prediction is that the lost revenue won't be important enough to undermine the recommendation. But that is only one possible gap to examine; we should also keep track of how the citizen expects the proposed plan to work.
Working the answers
- A
The argument doesn't require this to be the worst recession ever. Even if another recession was worse, the current unemployment problem could call for action. We need a connection supporting this tax proposal, not a historical ranking of recessions.
- B
This gives a general relationship between the size of a tax cut and the likelihood of investing. The citizen doesn't need that relationship to hold across different cuts or groups. This particular tax cut could lead to increased investment even if making it still larger wouldn't make anyone more likely to invest.
Don't confuse the claim that this plan will produce more investment with the broader claim that bigger tax cuts always improve the chances. The latter isn't required.
- C
Comparing the two income groups' past totals doesn't tell us what this tax cut would accomplish. Upper-income citizens could have invested less in the past and still use the proposed cut in ways that increase investment now. The plan doesn't depend on their having already outinvested lower-income citizens.
- DCorrect
This focuses on the mechanism of the proposal rather than the lost-revenue concern I initially predicted. The citizen expects money released by the tax cut to produce more investment. That requires the people receiving the money to use it in ways that increase investment.
Suppose they don't. Then the tax cut doesn't start the chain the citizen relies on: more investment, followed by new jobs. Saying that investment won't grow without the cut doesn't fix this. A measure can be required for a result without being enough to produce it.
D doesn't say every recipient must invest every dollar, or that the investment must happen through one particular method. It supplies the necessary connection between the money made available to upper-income citizens and the expected increase in investment.
- E
A proposal can work even if it has never been tried successfully before. Past tax cuts creating jobs could lend support, but this argument doesn't require that history. The necessary question is whether the proposed cut can work through the investment mechanism the citizen describes.
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