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In order to raise revenue, the federal government planned a

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In order to raise revenue, the federal government planned a [#permalink] New post 01 May 2012, 20:07
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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 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.
[Reveal] Spoiler: OA
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Re: Tax Delinquents [#permalink] New post 01 May 2012, 21:31
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] New post 01 May 2012, 21:44
E should be it IMO..fact undermining C has been provided in the argument..
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Re: Tax Delinquents [#permalink] New post 01 May 2012, 22:02
E should be it. C is irrelevant

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Re: Tax Delinquents [#permalink] New post 01 May 2012, 22:24
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] New post 02 May 2012, 05:15
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] New post 02 May 2012, 08:56
Yes... C makes no sense at all....
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Re: Tax Delinquents [#permalink] New post 06 May 2012, 08:26
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] New post 19 May 2012, 19:59
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] New post 23 May 2012, 01:34
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] New post 25 Jul 2012, 05:56
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(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] New post 25 Jul 2012, 07:22
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] New post 04 Dec 2012, 11:40
The passage clearly mentions that federal government will NOT charge penalties. Hence comparison of penalties in choice C is irrelevant.

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Re: In order to raise revenue, the federal government planned a [#permalink] New post 01 Sep 2013, 05:34
gmihir wrote:
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.


One for E, C does not make sense and is really out of scope. This is just a fact.
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Re: In order to raise revenue, the federal government planned a [#permalink] New post 01 Sep 2013, 07:53
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samatace wrote:
gmihir wrote:
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.


One for E, C does not make sense and is really out of scope. This is just a fact.


IMO its C, if delinquents are not paying for lower penalties in state, they shall certainly not pay for higher penalties in federal taxes.
For E, even if they had an oversight in state taxes, what makes it compelling that they will again have an oversight in Federal Taxes as well?
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Re: In order to raise revenue, the federal government planned a [#permalink] New post 02 Sep 2013, 01:28
ygdrasil24 wrote:
samatace wrote:
gmihir wrote:
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.


One for E, C does not make sense and is really out of scope. This is just a fact.


IMO its C, if delinquents are not paying for lower penalties in state, they shall certainly not pay for higher penalties in federal taxes.
For E, even if they had an oversight in state taxes, what makes it compelling that they will again have an oversight in Federal Taxes as well?


With C we can say "ok, usually they would try to avoid paying federal taxes because of the high penalty, hence they are more likely to pay for state tax, however in this case they will not have any penalties for federal taxes". How come C is correct?? :?

E says that they tend to be forgetful to pay state taxes, hence they will forget to pay federal tax too (or any other kind of tax), so the federal government should not count on reducing the penalty because it doesn't affect the tax payers.

I picked E btw.
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Re: In order to raise revenue, the federal government planned a [#permalink] New post 12 Nov 2013, 21:23
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Guys.. I think C makes sense.


C.Although federal tax delinquents usually must pay high financial penalties, the states require far lower financial penalties.

Since federal penalty was high , it was more likely that more people have paid the federal taxes on time .
However, since the penalty on state taxes was low, it was more likely that people might have overlooked or chose not to pay.


Simple reasoning: If the punishment is harsh for a particular crime then that particular crime is committed less frequently.

This implies that state might have more revenue to collect then federal government.
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Re: In order to raise revenue, the federal government planned a [#permalink] New post 12 Nov 2013, 22:47
But this is a causal relationship "If the punishment is harsh for a particular crime then that particular crime is committed less frequently."
with the assumption that "All ppl commit crimes and will be punished".. Seems to be a far fetched statement.. IMO OA should be E...

Thoughts anyone???




rim200991 wrote:
Guys.. I think C makes sense.

C.Although federal tax delinquents usually must pay high financial penalties, the states require far lower financial penalties.

Since federal penalty was high , it was more likely that more people have paid the federal taxes on time .
However, since the penalty on state taxes was low, it was more likely that people might have overlooked or chose not to pay.


Simple reasoning: If the punishment is harsh for a particular crime then that particular crime is committed less frequently.

This implies that state might have more revenue to collect then federal government.
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Re: In order to raise revenue, the federal government planned a [#permalink] New post 19 Jan 2014, 06:39
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i will go with C. Below is the conclusion

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.

Now we need to bear in mind that no amount of tax is pardoned, only penalty is pardoned. Had there been no amnesty program, tax collected will be Original tax + penalty.
Due to amnesty both state and federal govt is going to pardon the penalty.

Only if Federal penalty is higher than state penalty, the total tax collected by federal govt will be less than state govt.
Ans choice C mentions exactly the same thing.

As for E - chosen by around 60% respondents, here is my understanding.

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.

We are looking for strengthener to conclusion : while E tells the reason for delinquency of federal and state tax..it no way gives us the reason to believe why Federal tax program will collect lesser amount.

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Re: In order to raise revenue, the federal government planned a [#permalink] New post 23 Jan 2014, 07:37
whats the OA?
Can someone explain
Re: In order to raise revenue, the federal government planned a   [#permalink] 23 Jan 2014, 07:37
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