GMAT Critical Reasoning (CR) | Re: In order to raise revenue, the federal government planned a

I still don't get it. I think it's C.

Fed taxes high penalties = less people lie about taxes.
State taxes lower penalties = more people will lie.

When the government said "hey guys, we'll waive the penalties so this is your chance",

People who lied on Fed taxes = Still not many people. And whoever lied to avoid taxes will be like "nahh I lied ANYWAY, so still nahhh"
People who lied to States taxes = a lot of people lied, so some might consider to pay. Also, if the state