PrepTest 147, Section 3, Question 27
Passage A In 1994, Estonia became the first(490 more words not shown)
Passage A(253 more words not shown)
Passage B(245 more words not shown)
Which one of the following,(23 more words not shown)
- AEven under a(18 more words not shown)
- BExisting tax codes(21 more words not shown)
- CIt is unfair(28 more words not shown)
- DMost taxpayers prefer(17 more words not shown)
- EThe goal of(21 more words not shown)
Reading the passage
A’s final argument links the complexity of existing codes to tax avoidance, then uses that point in its defense of flat taxes. But complexity and graduated rates are not necessarily the same thing. Could we remove loopholes and special deductions while retaining different rates for different income layers?
What we’re looking for
That response would let B defend graduation while addressing A’s actual concern about avoidance.
Working the answers
- A
Underreporting would show that a flat tax does not eliminate every means of avoidance. But A’s argument does not require perfect elimination. B offers a more direct objection to treating flat rates as the solution to opportunities created by complexity.
- BCorrect
This locates the main source of avoidance in loopholes and deductions, not graduated rates. A reason to simplify those features is therefore not automatically a reason to abandon graduation. The response does not deny that a flat-tax proposal could remove loopholes; it questions whether flatness deserves the credit for that improvement.
- C
People at other income levels may also avoid taxes, but that does not answer A’s explanation of high earners’ opportunities or show that graduated rates should be retained. The fairness of singling out a group is a different issue.
- D
What taxpayers prefer does not establish which system creates opportunities for avoidance or whether those opportunities justify changing to flat rates.
- E
Replacing income taxes with consumption taxes proposes a different alternative. It does not defend B’s graduated system against A’s specific argument about why a flat income tax is preferable.
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