Amtown s public schools are supported primarily by town : GMAT Critical Reasoning (CR)
Check GMAT Club Decision Tracker for the Latest School Decision Releases http://gmatclub.com/AppTrack

 It is currently 20 Jan 2017, 14:57

### GMAT Club Daily Prep

#### Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

# Events & Promotions

###### Events & Promotions in June
Open Detailed Calendar

# Amtown s public schools are supported primarily by town

Author Message
TAGS:

### Hide Tags

Verbal Forum Moderator
Joined: 23 Oct 2011
Posts: 283
Followers: 35

Kudos [?]: 750 [1] , given: 21

Amtown s public schools are supported primarily by town [#permalink]

### Show Tags

28 Apr 2012, 21:41
1
KUDOS
3
This post was
BOOKMARKED
00:00

Difficulty:

5% (low)

Question Stats:

77% (02:02) correct 23% (01:00) wrong based on 293 sessions

### HideShow timer Statistics

Amtown’s public schools are supported primarily by town property taxes. The town plans to eliminate the property tax and support schools with a new four-percent sales tax on all retail items sold in town. Four percent of current retail sales is substantially less than the amount currently collected through property taxes, but town planners believe that adopting this plan will not have a negative impact on the funds available for the town’s public schools because ______.

Which of the following most logically completes the argument?

A) a new shopping center that will draw shoppers from neighboring towns will open this year in Amtown
b) many Amtown residents are planning to leave town due to high property taxes
c) a number of parents who currently send their children to Amtown’s public schools do not pay property taxes.
d) the sales tax in neighboring towns is much higher than four percent
e) Amtown was recently featured in a magazine as one of the top 10 weekend getaways from a nearby city.

Main CR Qs link - cr-qs-600-700-level-131508.html
[Reveal] Spoiler: OA

_________________

********************
Push +1 kudos button please, if you like my post.

If you have any questions
New!
Intern
Joined: 25 Apr 2012
Posts: 16
Followers: 0

Kudos [?]: 12 [0], given: 1

### Show Tags

29 Apr 2012, 23:43
1
This post was
BOOKMARKED
Yes, I go with option 'A'.
'B' can be eliminated because, effect on property tax is irrelevant as we are weighing the option of sales tax.
'C' can be eliminated as the number of parents from whom property tax is not being collected does not matter here because we are weighing the option of sales tax.
'D' can be eliminated because, sales tax of other towns is irrelevant.
'E' seems a bit irrelevant and not an increase in sales tax hinted.
Option 'A' seems better, as the new shopping centre may enhance sales tax which may compensate the gap that is expected from adoption of new plan.
_________________

Ravi Sankar Vemuri

Magoosh GMAT Instructor
Joined: 28 Nov 2011
Posts: 307
Followers: 521

Kudos [?]: 984 [1] , given: 2

### Show Tags

30 Apr 2012, 10:14
1
KUDOS
Expert's post
We need an answer choice that explains how the 4% retail tax will be able to generate enough revenue to match the revenue generate from the previous property tax.

(A) provides such an explanation: a new mall, bringing customers from other cities, will lead to more people buying products. Customers will have to pay 4% retail tax and thus enough revenue will be generated so that revenues from sales tax will be at least as high as those from the erstwhile property tax. CORRECT

(B) Fewer residents means fewer people being charged the 4% and presumably less revenue coming from the retail tax. INCORRECT

(C) Does not relate to retail tax.

(D) The neighboring town is irrelevant.

(E) In of itself a Top 10 billing in a magazine does not mean that Amtown can expect a massive influx of money spent on retail. At least nowhere as much as Amtown can expect a surge in revenues from a retail sales, the way it can with the opening of the mall in (A).

Hope that helps .
_________________

Christopher Lele
Magoosh Test Prep

Manager
Status: struggling with GMAT
Joined: 06 Dec 2012
Posts: 225
Concentration: Accounting
GMAT Date: 04-06-2013
GPA: 3.65
Followers: 14

Kudos [?]: 344 [0], given: 46

Amtown s public schools are supported primarily by town [#permalink]

### Show Tags

06 Mar 2013, 13:22
Amtown’s public schools are supported primarily by town property taxes. The town plans to eliminate the property tax and support schools with a new four-percent sales tax on all retail items sold in town. Four percent of current retail sales is substantially less than the amount currently collected through property taxes, but town planners believe that adopting this plan will not have a negative impact on the funds available for the town’s public schools because ______.

Which of the following most logically completes the argument?
(A)a new shopping center that will draw shoppers from neighboring towns will open this year in Amtown
(B)many Amtown residents are planning to leave town due to high property taxes
(C)a number of parents who currently send their children to Amtown’s public schools do not pay property taxes.
(D)the sales tax in neighboring towns is much higher than four percent
(E)Amtown was recently featured in a magazine as one of the top 10 weekend getaways from a nearby city.

Need detail explanation..............
Manager
Joined: 27 Feb 2012
Posts: 137
Followers: 1

Kudos [?]: 49 [0], given: 22

Re: Amtown s public schools are supported primarily by town [#permalink]

### Show Tags

23 Mar 2013, 09:46
mun23 wrote:
Amtown’s public schools are supported primarily by town property taxes. The town plans to eliminate the property tax and support schools with a new four-percent sales tax on all retail items sold in town. Four percent of current retail sales is substantially less than the amount currently collected through property taxes, but town planners believe that adopting this plan will not have a negative impact on the funds available for the town’s public schools because ______.

Which of the following most logically completes the argument?
(A)a new shopping center that will draw shoppers from neighboring towns will open this year in Amtown
(B)many Amtown residents are planning to leave town due to high property taxes
(C)a number of parents who currently send their children to Amtown’s public schools do not pay property taxes.
(D)the sales tax in neighboring towns is much higher than four percent
(E)Amtown was recently featured in a magazine as one of the top 10 weekend getaways from a nearby city.

Need detail explanation..............

Four percent of current retail sales is substantially less than the amount currently collected through property taxes, but town planners believe that adopting this plan will not have a negative impact on the funds available for the town’s public schools because

We need to focus on money collection.
We need to make sure that there is no impact due to change in tax behavior. Amount of money from both should be same to avoid any negative effect.
If the retails sales are expected to increase due to some reason this will offset the lower amount collection.
This is what A says. Neighboring shoppers means extra sales and hence extra budget for schools.
_________________

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

Please +1 KUDO if my post helps. Thank you.

VP
Status: Final Lap Up!!!
Affiliations: NYK Line
Joined: 21 Sep 2012
Posts: 1096
Location: India
GMAT 1: 410 Q35 V11
GMAT 2: 530 Q44 V20
GMAT 3: 630 Q45 V31
GPA: 3.84
WE: Engineering (Transportation)
Followers: 37

Kudos [?]: 527 [0], given: 70

Re: Amtown s public schools are supported primarily by town [#permalink]

### Show Tags

23 Mar 2013, 11:53
mun23 wrote:
Amtown’s public schools are supported primarily by town property taxes. The town plans to eliminate the property tax and support schools with a new four-percent sales tax on all retail items sold in town. Four percent of current retail sales is substantially less than the amount currently collected through property taxes, but town planners believe that adopting this plan will not have a negative impact on the funds available for the town’s public schools because ______.

Which of the following most logically completes the argument?
(A)a new shopping center that will draw shoppers from neighboring towns will open this year in Amtown
(B)many Amtown residents are planning to leave town due to high property taxes
(C)a number of parents who currently send their children to Amtown’s public schools do not pay property taxes.
(D)the sales tax in neighboring towns is much higher than four percent
(E)Amtown was recently featured in a magazine as one of the top 10 weekend getaways from a nearby city.

Need detail explanation..............

Hi Mun23
The question is on lower side.....
Lets focus on the conclusion:-
Though the sales tax revenue amounts to a lesser value than the revenue collected from property tax, planners are confident that the sales tax amount will see a rise.
It is not mentioned why will that rise be? we have to find, that reason......So one probable and quickest way to think is that people who previously did not paid the tax will now pay the tax because they want the school not to run out of funds.....or something that support the idea that newer shops will be set up and these shops will help increase the tax base....

With that in mind attack the answer choices:
A. So brings in new idea that help increase the sales tax. probable answer...
B. Weakener...If the residents leave the town their tax base will decline.
C. Does not present any solution, just presents fact.
D. What we will do by knowing other town's tax rate.
E. If its featured as top 10 weekend getaways...how is it going to change the present condition...this is already present.....Yes if it presented that due to some reasons...the city is going to encounter more customers during weekend, than it could have been considered......

Consider Kudos If my post helps!!

Archit
Senior Manager
Joined: 16 Dec 2011
Posts: 452
Followers: 11

Kudos [?]: 197 [0], given: 70

Re: Amtown s public schools are supported primarily by town [#permalink]

### Show Tags

22 Apr 2013, 20:08
All duplicate threads on this topic have been merged.

Please check and follow the Guidelines for Posting in Verbal GMAT forum before posting anything.
Director
Joined: 03 Aug 2012
Posts: 916
Concentration: General Management, General Management
GMAT 1: 630 Q47 V29
GMAT 2: 680 Q50 V32
GPA: 3.7
WE: Information Technology (Investment Banking)
Followers: 23

Kudos [?]: 692 [0], given: 322

Re: Amtown s public schools are supported primarily by town [#permalink]

### Show Tags

06 Oct 2013, 21:55
I presume the flow of argument is different than that stated by previous posters.

this plan will not have a negative impact on the funds available for the town’s public schools
because ______

The structure implies that although AMOUNT collected through SALES TAX is less than that collected through PROPERTY TAX, this plan will not have a negative impact on the funds available for the town’s public schools because ______

IMHO, I think what is needed in the blank is how the PROPERTY TAX is expected to have negative impact that SALES TAX won't have.

(B). Says "many Amtown residents are planning to leave town due to high property taxes".

Lower property taxes => Lower collection => NEGATIVE IMPACT which SALES TAX won't have as per the stimulus.

Rgds,
TGC!
_________________

Rgds,
TGC!
_____________________________________________________________________
I Assisted You => KUDOS Please
_____________________________________________________________________________

Manager
Joined: 15 Mar 2012
Posts: 71
Followers: 0

Kudos [?]: 5 [0], given: 20

### Show Tags

11 Jan 2014, 21:50
Hi,

Thank you for your explanation but I just couldn't understand this part: "Customers will have to pay 4% retail tax and thus enough revenue will be generated ..." - how do we know it'll be enough/good enough?

Instead I thought B was right because residents were leaving town because of high property taxes, so, if taxes continued, the total amount would anyways reduce but if taxes are removed, people would want to stay back because the only reason they were leaving the town was the property taxes.
B: many Amtown residents are planning to leave town due to high property taxes

ChrisLele wrote:
We need an answer choice that explains how the 4% retail tax will be able to generate enough revenue to match the revenue generate from the previous property tax.

(A) provides such an explanation: a new mall, bringing customers from other cities, will lead to more people buying products. Customers will have to pay 4% retail tax and thus enough revenue will be generated so that revenues from sales tax will be at least as high as those from the erstwhile property tax. CORRECT

(B) Fewer residents means fewer people being charged the 4% and presumably less revenue coming from the retail tax. INCORRECT

(C) Does not relate to retail tax.

(D) The neighboring town is irrelevant.

(E) In of itself a Top 10 billing in a magazine does not mean that Amtown can expect a massive influx of money spent on retail. At least nowhere as much as Amtown can expect a surge in revenues from a retail sales, the way it can with the opening of the mall in (A).

Hope that helps .
Senior Manager
Joined: 03 May 2013
Posts: 356
Location: India
Concentration: Operations, Human Resources
Schools: ISB '16, IIMA (M)
GPA: 4
WE: Human Resources (Human Resources)
Followers: 3

Kudos [?]: 118 [0], given: 70

Re: Amtown s public schools are supported primarily by town [#permalink]

### Show Tags

11 Jan 2014, 23:40
Amtown’s public schools are supported primarily by town property taxes. The town plans to eliminate the property tax and support schools with a new four-percent sales tax on all retail items sold in town. Four percent of current retail sales is substantially less than the amount currently collected through property taxes, but town planners believe that adopting this plan will not have a negative impact on the funds available for the town’s public schools because ______.

Which of the following most logically completes the argument? WE HAVE TO INCREASE RETAIL SALES SUCH THAT 4 % OF RETAIL SALES COLLECTED AS SALES TAX EXCEEDS THE PROPERTY TAXES, IN FUTURE

A) a new shopping center that will draw shoppers from neighboring towns will open this year in Amtown...WILL INCREASE AMOUNT COLLECTED THROUGH SALES TAX.....CORRECT
b) many Amtown residents are planning to leave town due to high property taxes.....WHY ARE THEY PLANNING TO LEAVE SINCE PROPERTY TAXES ARE BEING ELIMINATED...LET THEM...MORE OVER EVEN IF THEY WERE TO LEAVE AND PROPERTY TAXES WERE TO CONTINUE...SOMEBODY ELSE WOULD HAVE PAID THE SAME.....IRRELEVANT
c) a number of parents who currently send their children to Amtown’s public schools do not pay property taxes....IRRELEVANT.
d) the sales tax in neighboring towns is much higher than four percent......WHAT NEIGHBORING TOWN DOES IS IRRELEVANT
e) Amtown was recently featured in a magazine as one of the top 10 weekend getaways from a nearby city.....THIS WAS A THING OF THE PAST....EVEN WITH THIS, THE Four percent of current retail sales was substantially less than the amount currently collected through property taxes... WE HAVE TO LOOK FOR WHAT IS IN STORE IN FUTURE THAT WILL ENHANCE COLLECTION THROUGH SALES TAX ... INCORRECT
GMAT Club Legend
Joined: 01 Oct 2013
Posts: 10534
Followers: 919

Kudos [?]: 203 [0], given: 0

Re: Amtown s public schools are supported primarily by town [#permalink]

### Show Tags

27 Apr 2015, 18:13
Hello from the GMAT Club VerbalBot!

Thanks to another GMAT Club member, I have just discovered this valuable topic, yet it had no discussion for over a year. I am now bumping it up - doing my job. I think you may find it valuable (esp those replies with Kudos).

Want to see all other topics I dig out? Follow me (click follow button on profile). You will receive a summary of all topics I bump in your profile area as well as via email.
Re: Amtown s public schools are supported primarily by town   [#permalink] 27 Apr 2015, 18:13
Similar topics Replies Last post
Similar
Topics:
5 To improve the town’s overcrowded school system, the town council ha 3 25 Feb 2016, 05:07
Amtown s public schools are supported primarily by town 0 23 Mar 2013, 11:53
If the public library shared by the adjacent towns of 6 07 Jun 2009, 17:05
If the public library shared by the adjacent towns of 13 22 Feb 2008, 02:41
If the public library shared by the adjacent towns of 7 16 Mar 2007, 09:34
Display posts from previous: Sort by