#26 - Global Reference, Point at Issue

[Administrator]

Complete Question Explanation


(See the complete passage discussion here: lsat/viewtopic.php?t=14276)

GR, Point at Issue. The correct answer choice is (B)

This question asks for the statement over which the two authors would be most likely to disagree.

Answer choice (A): Neither author would disagree with this sentiment, so this is not the point of
disagreement.

Answer choice (B): This is the correct answer choice. The first author believes that the wealthy are
likely to pay more under a progressive tax system, while the second author believes that high-income
earners are likely to pay less under a flat tax system.

Answer choice (C): Neither author would try to refute the fact that flat tax systems can be put into
practice, so this cannot be the right answer.

Answer choice (D): There is insufficient evidence in Passage A to determine conclusively what this author would think, although the discussion towards the end suggests possible disagreement. The author of Passage B conclusively disagrees with this statement (lines 36-39). Therefore, this answer choice should be eliminated.

Answer choice (E): Neither author would agree with this statement, so this does not represent a point
of disagreement between the two authors.

[jmramon]

Hi!

I'm confused as to why "B" is the correct answer and not "D".

First, why I thought "D" was correct: From my perspective, the author of passage A in lines 12-15 seems to indicate that they do think graduated progressive systems make higher-income taxpayers pay a higher rate on their entire earnings. The author of passage B, on the other hand, corrects this misunderstanding of progressive tax systems in lines 31-9, explaining that higher earners only pay a higher rate on dollars above a certain threshold and are not taxed this higher rate on their entire income--the misconception represented in passage A.

From my understanding of the passage and answer "B," both authors seem to acknowledge that higher-income earners would pay less under a flat tax system than under a graduated progressive system. The author of passage A seems to concede this in lines 21-9, but to a lesser degree by stating high income earners would pay as much tax in either system as a result of legal loopholes and tax credits. Passage B's author certainly states that high income earners will pay less in taxes under a flat tax system when compared to a graduated progressive system in lines 54-8.

I can now see how B's statement that high income earners pay the same in taxes under each system qualifies this as a winning answer. However, what makes "D" wrong?

Thanks for the help!

[Francis O'Rourke]

Hi Ramon,

I'll try to give you more details on the original explanation of answer choice (D) above. Both authors would likely agree that graduated, progressive systems make high-income earners pay more overall. Passage A states that progressive systems make high-earners pay a larger share of their incomes. We can infer that Passage B would be unlikely to object to this, since this is the definition of a progressive tax system

There is a difference between share and rate in this passage. In this context the share refers to the percent of total income over a year. So if someone earns $100,000 and pays $20,000 in taxes, their share is 20% or 1/5 of their income. Both authors agree that high-income earners would end up paying a higher share of their total income in a graduated progressive system.

Income tax rates are used in a different way in these passages when discussing progressive systems. You can pay multiple rates in a graduated system. For example, everyone who earns $50,000 would end up paying perhaps 5,000, or 10% of their income. People in this same country earning $100,000 would would pay a rate of 10% on the first $50,000 that they earn, then 30% on the next $50,000 that they earn. In the end, these high earners would pay the same rate as the low earners on the first half of their income, but a different rate on the second half of their income. This is explained in lines 33-39.

In this way, we can say that both authors would likely agree that higher earners would pay a different rate on the entirety of their income, as the administrator indicated, but the same rate on some parts of their earnings.

[jmramon]

Ah, okay! I see the subtle difference that is meant now between high-income earners paying a higher rate on the entirety on the total income, although they pay the same rate on a part of their income yet more above those non-equal dollars. Thank you very much for taking the time to explain this in a different manner!

[snowy]

Hi! Can you clarify where Author B implies that a flat tax system can be progressive, as per the given explanation above for why answer choice A is incorrect? I might be especially confused by the intended meaning with using the word progressive here.

Also, in terms of the explanation given for why B is correct, I thought that Author A says the wealthy pay about the same amount under both, while B says the wealthy pay less under flat tax systems. Is this interpretation correct? I wasn't sure due to the discrepancy between this understanding and that of the answer explanation above.

Thank you!!

[James Finch]

Hi Snowy,

"Progressive" here means graduated tax rates, that tax rates get "progressively" higher as one earns more income. The type of flat-tax that both passages are talking about contains a threshold exemption, a minimum income below which one would pay no tax, so it would be "progressive" in that it would have two tax rates: 0% and whatever the flat-tax rate would be. Passage A explicitly makes this argument on lines 19-21, and passage B implicitly concedes the point on lines 48-50. This means answer choice (A) is incorrect.

What makes (B) correct is exactly what you've mentioned, that passage B explicitly states in the final sentence that high-income earners would pay less under a flat tax, while passage A says that high-income earners usually pay roughly the same amount.

Hope this clears things up!

[snowy]

Thanks a ton for confirming, James! I really appreciate it.