CR: Population and Tax

[JbhB682]

Hi Experts,
please let me know where is the illogic in my reasoning for not picking A

-- choice A talks about two paths forward for "other services" that may be impacted ...deterioration or elimination ..... i did not like this option because i thought a third option was viable which was just cutting back on "other services" ..example :

public libraries are tax funded ...if less revenues ...libraries don't have to deteriorate in quality or be eliminated .... just shut down FEW libraries (Cut back in number of operating libraries), but that doesn't imply deterioration nor elimination

Hence i eliminated A

Please let me know where is the illogic in this
-----------

[JbhB682]

Question on D with an example

D. A city that suffers revenue losses because of a sharp decline in population can make up some of the lost tax revenue by raising tax rates, provided the city's tax rates are low in relation to those of other cities

City A's tax rate is 20 %
-- if City A , taxes were raised by 10 % leading to the loss in revenues because of population per the red
-- City A decides to raise taxes even more by 2 % in order to make up some of the lost tax revenue per the blue

new tax rate is thus no 32 %

Per the blue, there are other cities with even higher tax rates ( say City B has 40 %)

Why not assume, some folks will come from City B into City A because of the lower effective tax rates in City A

[Sage Pearce-Higgins]

Good thinking. The problem is that tax rates are not the only factor determining where people live. Imagine if people leave a city because of, say, pollution. Even if the city has lower taxes than other places, they might still leave.

Your example doesn't make sense to me. You wrote that people left City A because the tax rate was raised by 10%. Yet you want to say that another tax rate rise (of 2%) will bring them back. This seems illogical.