It Is True That Developments Since The Last War In Britain Have So Increased GMAT Reading Comprehension

Reading Passage Question

It is true that developments since the last war in Britain have so increased the progressive character of the income tax as to make the burden of taxation progressive throughout and that, through redistributive expenditure on subsidies and services, the income of the very lowest classes has been increased... by as much as 22 percent. But the latter development is little dependent on the present high rates of progression but is financed mainly by the contributions of the middle and upper ranges of the middle class.

All arguments in support of progression can be used to justify any degree of progression. Its advocates may realize that beyond a certain point the adverse effects on the efficiency of the economic system may become so serious as to make it inexpedient to push it any further. But the argument based on the presumed justice of progression provides for no limitation, as has often been admitted by its supporters, before all incomes above a certain figure are confiscated and those below left untaxed. Unlike proportionality, progression provides no principle that tells us what the relative burden of different persons ought to be. It is no more than a rejection of proportionality in favor of a discrimination against the wealthy without any criterion for limiting the extent of this discrimination. Because there is no real rate of progression that can be demonstrated by formula, it is only the newness of the principle that has prevented its being carried at once to punitive rates. But there is no reason why 'a little more than before' should not always be represented as just and reasonable.

It is the great merit of proportional taxation that it provides a rule which is likely to be agreed upon by those who will pay absolutely more and those who will pay absolutely less and which, once accepted, raises no problem of a separate rule applying only to a minority. Even if progressive taxation does not name the individuals to be taxed at a higher rate, it discriminates by introducing a distinction that aims at shifting the burden from those who determine the rates onto others. In no sense can a progressive scale of taxation be regarded as a general rule applicable equally to all. In no sense can it be said that a tax of 20 percent on one person's income and a tax of 75 percent on the larger income of another person are equal. Progression provides no criterion whatever of what is and what is not to be regarded as just. It indicates no halting point for its application, and the 'good judgment' of the people on which its defenders are usually driven to rely as the only safeguard is nothing more than the current state of opinion shaped by past policy.

“It is true that developments since the last war in Britain have so increased”- is a GMAT reading comprehension passage along with answers. The candidates must possess sufficient skills in order to interpret English GMAT reading comprehension. The GMAT Reading Comprehension section brings with it three sets of questions that need to be responded to by the candidates. The GMAT Reading Comprehension questions ask for the passage structure as a whole. The candidate needs to analyse and apply ideas to illustrate the passage concept. The candidates can brush up their knowledge by practising GMAT Reading Comprehension Practice Questions.

Solutions and Explanation

What is the primary focus of this passage?

subsidies and services
punitive rates of taxation
progressive taxation
proportional taxation
rate of proportionality determined by formula

Answer: (C)
Explanation: The main focus of the passage is to discuss progressive taxation and the tax burden on people with different income ranges. Therefore, option C is the correct answer as it satisfies the discussion of the passage. The rest of the options thus get eliminated as they do not have relevant information as illustrated in the passage.

This passage argues against a separate rate of taxation for a minority on the grounds that it is:

financially unfeasible
monetarily irresponsible
unjustly discriminatory
based on changing public opinion
reactive to major social change

Answer: (C)
Explanation: The passage implies that there exists a separate rate of taxation for a minority. It unjustly discriminates against the minority class since it will create an additional burden on people with low income. Therefore, option C is the correct answer as it justifies the facts described in the passage. The rest of the options thereby get out of scope.

Which of the following is an effect of the progressive-income tax?

It has increased the income of the lowest classes by as much as 22 percent.
It provides a principle by which taxation may be limited.
It limits discrimination against the wealthy.
It applies generally to all.
It cannot be carried to punitive rates.

Answer: (A)
Explanation: As per the discussion of the passage, the progressive income tax has enhanced the incomes of the lowest classes by 22 per cent. Therefore, option A is the correct answer since it fulfills the criteria of the given passage. The rest of the options thereby get eliminated as they hold irrelevant information.

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It Is True That Developments Since The Last War In Britain Have So Increased GMAT Reading Comprehension

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