Examkin

Question

Difficulty: HardIdentifying Background Information and Contextual Claims

Prior to the 2018 corporate tax overhaul, multinational technology firms routinely cited high statutory domestic tax rates as the primary catalyst for holding profits in offshore subsidiaries. Advocates of tax reform claimed that reducing the domestic rate would prompt these corporations to repatriate funds and invest heavily in domestic research facilities. However, recent financial disclosures show that despite the rate reduction, domestic research expenditures have remained stagnant while share buybacks surged. Clearly, lowering domestic corporate tax rates is ineffective at directly stimulating private R&D investment.

In the argument given, the boldfaced portion plays which of the following roles?

  1. It provides background information regarding a historical situation that sets the context for a position that the argument subsequently challenges.Answer
  2. B
    It is a premise offered to directly support the main conclusion of the argument.
  3. C
    It is an intermediate conclusion drawn by the author in order to undermine the advocates' position.
  4. D
    It presents a counter-premise that the author attempts to reconcile with recent financial data.
  5. E
    It describes the main phenomenon that the argument's conclusion attempts to explain.

Answer

The boldfaced portion provides background information regarding a historical situation that sets the context for a position that the argument subsequently challenges.
The correct answer accurately describes the structural function of the bolded statement. The passage opens by describing the pre-2018 situation regarding corporate offshore holdings. This background explains why advocates expected tax cuts to stimulate domestic R&D, an expectation and policy outcome that the author subsequently argues against using recent empirical data.

Step-by-Step Solution

1
Analyze the passage structure and identify the role of each component.
The bolded statement describes the pre-2018 situation where firms cited high tax rates for keeping funds offshore. This is followed by the advocates' claim, contrastive evidence ('However...'), and the main conclusion ('Clearly...').
Deconstructing the argument flow separates context/background from premises and main conclusions.
2
Evaluate the relation of the boldfaced portion to the main conclusion.
The boldfaced statement is not a premise directly proving that tax cuts are ineffective; rather, it explains the contextual background under which advocates formulated their expectations.
Identifying whether a statement is context versus an active premise is key to resolving role questions.
3
Select the option matching this structural function.
The option stating that the bolded text provides background information setting the context for a position challenged by the argument accurately captures its role.
The author challenges the advocates' position which was based on the background scenario described in the bolded text.

Key Concept

Identifying Background Information and Contextual Claims
Estimated Time:2m 0s
Rate this question

Topics

Identifying Background Information and Contextual Claims

More questions from this topic