GetThisDone 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.
Main CR Qs link -
https://gmatclub.com/forum/cr-qs-600-700 ... 31508.htmlSchools are supported by property taxes.
Plan is to switch to 4% retail sales tax for supporting schools.
4% of Retail sales is less than amount collected through property tax.
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 give a reason why switching to 4% retail sales tax may be sufficient for schools. Why the plan may work.
Some reasons come to mind - What if the property tax collected used to be in excess of what is required by schools. We know that the schools were supported by property taxes but were all the property taxes collected used up by the schools? May be not. Perhaps some part of the taxes were used for other purposes.
Alternatively, what if retail sales is expected to see a jump soon? Then the 4% of retail sales may become sufficient for the schools. Note that we don't need to prove beyond doubt that the plan will work. We need to say why the planners believe that the plan will work.
(A) a new shopping center that will draw shoppers from neighboring towns will open this year in Amtown
Correct. This gives a reason why the plan may work. A new shopping centre will open which will draw shoppers from other towns. Hence, the retail sales is likely to increase. The planners believe that this increase in the retail sales and hence the collection will become sufficient for schools.
Push2808(B) many Amtown residents are planning to leave town due to high property taxes
Doesn't help the plan.
(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
Irrelevant
(E) Amtown was recently featured in a magazine as one of the top 10 weekend getaways from a nearby city.
Irrelevant. We are not given that this feature will increase tourist activity and hence retail sales.
Answer (A)