LSAT Explanation PT 43, S3, Q15: In 1975, a province reduced its

LSAT Question Stem

Each of the following, if true, could help to resolve the apparent discrepancy described above EXCEPT: 

Logical Reasoning Question Type

This is a Paradox question. 

Correct Answer

The correct answer to this question is D. 

LSAT Question Complete Explanation

The question type for this problem is a Paradox question, specifically a "Resolve Except" question. We are asked to find the answer choice that does NOT help resolve the apparent discrepancy in the passage.

The passage tells us that in 1975 and 1976, a province reduced its personal income tax rate by 2 percent each year for most taxpayers. Despite these decreases, the total amount of money collected from personal income taxes remained constant from 1974 to 1975 and rose substantially in 1976. This seems contradictory, and our goal is to find the answer choice that does not help explain this discrepancy.

Before discussing the answer choices, let's make sure we understand the difference between ratio (percentage) and amount. For example, imagine a small town where everyone earns $100, and the tax rate is 10%. The town collects $10 from each person. If the tax rate is reduced to 9%, but everyone's income increases to $110, the town still collects $9.90 from each person, which is close to the original amount. This illustrates how changes in the percentage of a proportion do not necessarily lead to the same type of change in the actual amount.

Now let's analyze the answer choices:

a) If the province's economy was especially prosperous in 1975 and 1976, it is reasonable to assume that the income of some taxpayers increased during these years. This could help explain why tax revenue did not decrease despite the reduction in tax rates, as the increased incomes could offset the lower rates.

b) If the definition of "personal income" was widened to include income from personal investments, this could also help explain the discrepancy. A broader definition of taxable income could mean that the province collected more tax revenue, even with the reduced rates.

c) If the personal income tax rate for the wealthiest individuals in the province rose during 1975 and 1976, this could help explain the discrepancy. The stimulus only states that the tax rate was reduced for most taxpayers, so it is possible that the wealthiest individuals paid higher taxes, which could offset the reduced rates for others.

d) If the province's total revenue from all taxes increased during both 1975 and 1976, it does not necessarily help explain the discrepancy. This information tells us nothing about the specific relationship between the personal income tax rate and the amount of money collected from personal income taxes. This answer choice leaves the paradox unresolved, making it the correct answer.

e) If a large number of people from other provinces moved to the province during 1975 and 1976, this could help explain the discrepancy. An increase in the pool of taxable income, such as more people paying taxes, could counteract the decrease in the income tax rate, resulting in a constant or increased tax revenue.

In summary, the correct answer choice is (d), as it does not help resolve the apparent discrepancy described in the passage. All other answer choices provide potential explanations for the discrepancy.