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Posted: Sat Apr 28, 2007 4:20 am Post subject: prep test

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Posted: Sat Apr 28, 2007 4:20 am Post subject: prep test [#permalink] New post 12 May 2007, 15:37
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Posted: Sat Apr 28, 2007 4:20 am Post subject: prep test

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In order to raise revenue, the federal government planned a tax amnesty program that allows tax delinquents to pay all owed tax without added financial penalty. However, economists projected that the federal government would collect a far lower percentage of total tax owed by delinquents than did state governments implementing similary programs.

Which of the following, if true, would most contribute to an explanation of the economists' projections.

A. Tax amnesty programs are only successful if they are widely publicized.
B. Most people who honestly pay their state tax are equally honest in paying their federal tax.
C. Although federal tax delinquents usually must pay high financial penalties, the states require far lower financial penalties.
D. The state tax rate varies considerably from state to state, but the federal tax is levied according to laws which apply to citizens of all the states.
E. Unlike most federal tax deliquents, most state tax delinquents fail to pay state tax because of an oversight rather than a decision not to pay.

I cant seem to understand why the answer is E
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Re: prep cr question [#permalink] New post 12 May 2007, 17:24
Jamesk486 wrote:
Posted: Sat Apr 28, 2007 4:20 am Post subject: prep test

--------------------------------------------------------------------------------

In order to raise revenue, the federal government planned a tax amnesty program that allows tax delinquents to pay all owed tax without added financial penalty. However, economists projected that the federal government would collect a far lower percentage of total tax owed by delinquents than did state governments implementing similary programs.

Which of the following, if true, would most contribute to an explanation of the economists' projections.

A. Tax amnesty programs are only successful if they are widely publicized.
B. Most people who honestly pay their state tax are equally honest in paying their federal tax.
C. Although federal tax delinquents usually must pay high financial penalties, the states require far lower financial penalties.
D. The state tax rate varies considerably from state to state, but the federal tax is levied according to laws which apply to citizens of all the states.
E. Unlike most federal tax deliquents, most state tax delinquents fail to pay state tax because of an oversight rather than a decision not to pay.

I cant seem to understand why the answer is E


federal tax deliquency - intentional or some other financial reasons.
state tax deliquency - not intentional or no financial reasons.

if that is the case, then state tax deliquents (who can pay) are most likely to pay than the federal tax deliquents (who probably cannot pay).

So E.
Re: prep cr question   [#permalink] 12 May 2007, 17:24
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Posted: Sat Apr 28, 2007 4:20 am Post subject: prep test

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