I didn't write the following blog post. It was already on the blog when I took over the URL. The following blog post may contain mistakes. -Steve
Here’s a Logical Reasoning question from the June 2004 LSAT.
Let's make a quick chain of phrases:
Down 2% for most in 75, 76 --> Money collected same 74 compared to 75 --> Way more money 75 to 76
Many things might not resolve the discrepancy, so we won't pre-phrase, and we'll go right to the choices:
A) The opposite of what we want because this would resolve the discrepancy. If the amount of income increased a lot (due to prosperity), an even lower tax rate might produce more revenue, as was the case here.
B) The opposite of what we want because it would resolve the discrepancy, similarly to A. Redefining income more broadly would increase taxable income just as the prosperity in A might, so revenue might increase even as tax rates fall.
C) The opposite of what we want. Higher rates on the richest taxpayers might more than offset the tax cuts on other taxpayers, resulting in a net revenue increase, as is the case here.
D) Correct. This is out of scope. Thus, it's correct because it doesn't address the argument's discrepancy, failing to resolve it. An increase in total revenue doesn't explain why revenue from personal income taxes grew despite lowering the rates. Total revenue may have increased for many reasons, and there's no explanation that helps with this discrepancy in the argument.
E) The opposite of what we want because it resolves the discrepancy. The people moving into the country increase total taxable income, so even if rates fall, total revenue might increase, as was the case here.
Remember:
1) Eliminate choices that are the opposite of what you're looking for. In this question, such choices resolved the discrepancy.
2) Create a chain of phrases to better understand the argument.
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