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In order to raise revenue, the federal government planned a [#permalink]
 01 May 2012, 21:07
Question Stats:
20% (02:06) correct
79% (01:20) wrong based on 94 sessions
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 similar 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 delinquents, most state tax delinquents fail to pay state tax because of an oversight rather than a decision not to pay.
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Re: Tax Delinquents [#permalink]
01 May 2012, 22:31
Are you sure that the OA is C? IMO, it is E. The federal government will receive less money than the states because the deliquents don't want to pay federal taxes.
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Re: Tax Delinquents [#permalink]
01 May 2012, 22:44
E should be it IMO..fact undermining C has been provided in the argument..
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Re: Tax Delinquents [#permalink]
01 May 2012, 23:02
E should be it. C is irrelevant
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Re: Tax Delinquents [#permalink]
01 May 2012, 23:24
thanks guys for confirming, i also had marked E , C makes little sense..just wanted to have a second opinion, to make sure i haven't missed anything, thanks again! 
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Re: Tax Delinquents [#permalink]
02 May 2012, 06:15
gmihir wrote: thanks guys for confirming, i also had marked E , C makes little sense..just wanted to have a second opinion, to make sure i haven't missed anything, thanks again! Please change the official answer in your first post.
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Re: Tax Delinquents [#permalink]
02 May 2012, 09:56
Yes... C makes no sense at all....
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Re: Tax Delinquents [#permalink]
06 May 2012, 09:26
hi all, Though i selected E too, after looking at the answer i am little confused now. In E, it is mentioned that the state tax deliquents are usually those who dont pay because of oversight. if that were true, a state tax amnesty program wouldnt have any special benefit because those people would have paid either way without needing any additional incentives. Hence, there is no reason why a federal program would be less successful than a state one. Am i wrong in my approach? Can someone clarify pls? 
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Re: Tax Delinquents [#permalink]
19 May 2012, 20:59
tsheshraj wrote: hi all, Though i selected E too, after looking at the answer i am little confused now. In E, it is mentioned that the state tax deliquents are usually those who dont pay because of oversight. if that were true, a state tax amnesty program wouldnt have any special benefit because those people would have paid either way without needing any additional incentives. Hence, there is no reason why a federal program would be less successful than a state one. Am i wrong in my approach? Can someone clarify pls? This argument is assuming that people who forgot to pay state taxes would be reminded and encouraged by state amnesty program to pay Taxes without penalty. Because these people didn't want to default on State Taxes, would pay the taxes more easily than people who defaulted on Federal Taxes.
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Re: Tax Delinquents [#permalink]
23 May 2012, 02:34
After spending more than 5 minutes on this question, I am convinced that the answer is E.
Great question.
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Re: In order to raise revenue, the federal government planned a [#permalink]
25 Jul 2012, 06:56
in 1:46 mins (C) clearly states that the federal penalties were higher than that of the state penalties so the delinquent cases found the offer good enough to repay the federal one.
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Re: In order to raise revenue, the federal government planned a [#permalink]
25 Jul 2012, 08:22
E. Unlike most federal tax delinquents, most state tax delinquents fail to pay state tax because of an oversight rather than a decision not to pay. So, I think most tax delinquents don't pay fed taxes because they decide not to, or simply put, don't want to pay. Those who don't pay state taxes are mostly forgetting to pay, not because they don't want to pay. Two different attitudes, why should the same method work for both? I think it is E.
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Re: In order to raise revenue, the federal government planned a [#permalink]
04 Dec 2012, 12:40
The passage clearly mentions that federal government will NOT charge penalties. Hence comparison of penalties in choice C is irrelevant. Posted from my mobile device 
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Re: In order to raise revenue, the federal government planned a
[#permalink]
04 Dec 2012, 12:40
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