Critical Reasoning (CR) | Re: When people evade income taxes by not declaring taxable income, a vici

HiGMATNinja ,

The argument seems to suggest that the government raises revenue because initially some of the taxpayers evaded the tax. As a result, they increase the tax rate to compensate for the loss of revenue.

In Option choice D, similary if the tax rate goes down, the initial tax evaders may forego tax evasation and the vicious circle may stop. How can we say that irrespective of low tax rate, if the government needs more tax revenue, the tax rate will eventually go up? I feel the tax rate is only going up because the initial revenue collections didnt meet the expectation not because the govt wanted more revenue.

Am i thinking in the right direction? I believe the answer can be since some people will forego tax evasion which can be 1% people also since some is between 1-100, the tax rate will eventually go up because 1% population is less to compensate for theloss.

Thanks