The tax system of the Republic of Grootland encourages

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The tax system of the Republic of Grootland encourages [#permalink]

26 Mar 2004, 14:31

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The tax system of the Republic of Grootland encourages borrowing by granting its taxpayers tax relief for interest paid on loans. The system also discourages saving by taxing any interest earned on savings. Nevertheless, it is clear that Grootland's tax system does not consistently favor borrowing over saving, for if it did, there would be no _____________.

Question:
Which of the following, if true, is the most logical completion of the argument above?

Answer:
A. tax relief in Grootland for those portions of a taxpayer's income, if any, that are set aside to increase that taxpayer's total savings.
B. tax relief in Grootland for the processing fees that taxpayers pay to lending institutions when obtaining certain kinds of loans.
C. tax relief in Grootland for interest that taxpayers are charged on the unpaid balance in credit card accounts.
D. taxes due in Grootland on the cash value of gifts received by taxpayer from banks trying to encourage people to open savings accounts.
E. taxes due in Grootland on the amoutn that a taxpayer has invested in interest-bearing savings accounts.
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26 Mar 2004, 14:34

It was between A and E and I choose A over E

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26 Mar 2004, 14:48

Another good question!

My answer is A

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26 Mar 2004, 14:49

A for me too.............E is just the opposite..........

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26 Mar 2004, 16:15

I will choose A.
A says the tax system is encouraging savings by giving tx relief on the money that is set aside for savings.

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26 Mar 2004, 21:08

I will go with A.
But it took me more than 2 mins.

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26 Mar 2004, 21:28

A here as well. This CR is really wordy and with the question posed the way it is makes it difficult to understand exactly whats happening. Good CR though, made me scratch my head.
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26 Mar 2004, 22:00

double negative questions are always tougher. OA is indeed A. we have to eliminate answers which either favor borrowing or disadvantage savings.
B) favors borrowing
C) favors borrowing
D) disadvantage savings
E) disadvantage savings

only A favors savings and is thus the answer.
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[#permalink] 26 Mar 2004, 22:00

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The tax system of the Republic of Grootland encourages

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