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Which of the following, if true, is the most logical [#permalink]
 14 Jan 2007, 04:11
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Which of the following, if true, is the most logical completion of the argument below?
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______
(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 taxpayers from banks trying to encourage people to open savings accounts
(E) taxes due in Grootland on the amount that a taxpayer has invested in interest-bearing savings accounts
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Director
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Re: cr - tax system [#permalink]
14 Jan 2007, 07:06
It is A.
Govt encourages borrowing by tax relief on interest paid
Govt discourages saving by tax due on interest earned
So, inconsistency can be see when:
either govt makes a tax due during borrowing or
govt gives some tax relief for saving.
AK47 wrote: Which of the following, if true, is the most logical completion of the argument below?
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______
(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
shows inconsistency
(B) tax relief in Grootland for the processing fees that taxpayers pay to lending institutions when obtaining certain kinds of loans
shows consistency for borrowing tax relief
(C) tax relief in Grootland for interest that taxpayers are charged on the unpaid balance in credit card accounts
again consistency for borrowing
(D) taxes due in Grootland on the cash value of gifts received by taxpayers from banks trying to encourage people to open savings accounts
consistent with tax due with savings
(E) taxes due in Grootland on the amount that a taxpayer has invested in interest-bearing savings accounts
same as D
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Director
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One more A guys.
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A it is ,but somehow i got stuck between A and C .......Re-reading gave me A. In real GMAT there won't be time to re-read though 
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Director
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A !
Very good question.
_________________
"Education is what remains when one has forgotten everything he learned in school."
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Manager
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I like A. All the choice talk about irrelevant information
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