Find all School-related info fast with the new School-Specific MBA Forum

It is currently 17 Sep 2014, 14:19

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

With Proposition 13, if you bought your house 11 years ago

  Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
TAGS:
SVP
SVP
User avatar
Joined: 28 May 2005
Posts: 1743
Location: Dhaka
Followers: 6

Kudos [?]: 40 [0], given: 0

GMAT Tests User
With Proposition 13, if you bought your house 11 years ago [#permalink] New post 21 Sep 2005, 09:40
00:00
A
B
C
D
E

Difficulty:

(N/A)

Question Stats:

0% (00:00) correct 0% (00:00) wrong based on 0 sessions
17. With Proposition 13, if you bought your house 11 years ago for $75,000, your property tax would be approximately $914 a year (1 percent of $75,000 increased by 2 percent each year for 11 years); and if your neighbor bought an identical house next door to you for $200,000 this year, his tax would be $2,000 (1 percent of $200,000). Without Proposition 13, both you and your neighbor would pay $6,000 a year in property taxes (3 percent of $200,000).
Which of the following is the conclusion for which the author most likely is arguing in the passage above?
(A) Proposition 13 is unconstitutional because it imposes an unequal tax on properties of equal value.
(B) If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.
(C) By preventing inflation from driving up property values, Proposition 13 has saved homeowners thousands of dollars in property taxes.
(D) If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates.
(E) Proposition 13 has benefited some homeowners more than others.
_________________

hey ya......

Manager
Manager
avatar
Joined: 26 Jun 2005
Posts: 122
Followers: 2

Kudos [?]: 0 [0], given: 0

 [#permalink] New post 21 Sep 2005, 12:29
D...the statement states that the houses are identical, therefore the sole reason the buyer is paying higher taxes is because he/she bought the house 11 years later. Its seems to me that a logical conclusion is that because of prop. 13 people pay different taxes for identical properties.
_________________

Chet

Director
Director
avatar
Joined: 11 Mar 2005
Posts: 726
Followers: 1

Kudos [?]: 22 [0], given: 0

GMAT Tests User
 [#permalink] New post 21 Sep 2005, 14:24
I will go with safest of all.

E is my choice.
Senior Manager
Senior Manager
avatar
Joined: 15 Aug 2005
Posts: 257
Location: Las Vegas, NV
Followers: 2

Kudos [?]: 0 [0], given: 0

GMAT Tests User
 [#permalink] New post 21 Sep 2005, 15:18
IMO, B. It's most supported by the passage.

A is out of scope. We're not talking about the constitutionality of Prop. 13

C is just wrong. No where is it stated that Prop 13 prevents inflationary effects on property values.

D is wrong because an identical HOUSE is not an identical PROPERTY

E can't be properly inferred from the passage. Prop 13 is the same for everyone. Rising home prices has been good for homeowners, not Prop 13.
Director
Director
avatar
Joined: 04 Jul 2004
Posts: 905
Followers: 3

Kudos [?]: 19 [0], given: 0

GMAT Tests User
 [#permalink] New post 21 Sep 2005, 15:22
(E) would be my choice too.
Its quite clear from the stem.
Director
Director
avatar
Joined: 14 Sep 2005
Posts: 998
Location: South Korea
Followers: 2

Kudos [?]: 31 [0], given: 0

GMAT Tests User
 [#permalink] New post 21 Sep 2005, 15:52
I pick (B).

If my math is correct, the tax rate is identical to every home owners.

* Proposition 13 = tax rate is 1 percent of the purchasing cost increased by 2 percent each yaer.

If you bought a house for $75,000 11 years ago, the SUM of the tax you've paid is $914. (1% of the cost increased by 2% for 11 years)

If you bought a house for $200,000 this year, the SUM of the tax you've paid is $2,000. (1% of the cost increased by 2% for 0 year)

However, without Proposition 13, you have to pay $6,000 (3%).

Therefore, if it had not been for Proposition 13, you have to pay more.


(A) Proposition 13 is unconstitutional because it imposes an unequal tax on properties of equal value.

>> The amount tax is unequal, but the tax rate is equal. Thus, very consitutional.


(B) If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.

>> Without Proposition 13, you have to pay more. Thus, increase in property taxes will follow.


(C) By preventing inflation from driving up property values, Proposition 13 has saved homeowners thousands of dollars in property taxes.

>> Not relevant.


(D) If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates.

>> The tax rate is the same for everybody. The tax amount is different according to the year of purchase and the cost of the house.


(E) Proposition 13 has benefited some homeowners more than others.

>> Proposition 13 has one identical tax rate, and it thus does not discriminate people.
SVP
SVP
User avatar
Joined: 28 May 2005
Posts: 1743
Location: Dhaka
Followers: 6

Kudos [?]: 40 [0], given: 0

GMAT Tests User
 [#permalink] New post 22 Sep 2005, 01:50
Good job guys. OA is B.
_________________

hey ya......

  [#permalink] 22 Sep 2005, 01:50
    Similar topics Author Replies Last post
Similar
Topics:
With Proposition 13, if you bought your house 11 years ago papillon86 15 07 Dec 2009, 01:03
With Proposition 13, if you bought your house 11 years ago ywilfred 11 02 Sep 2005, 05:42
With Proposition 13, if you bought your house 11 years ago wild_desperado 8 27 Jun 2005, 02:20
With Proposition 13, if you bought your house 11 years ago Janice 5 13 Dec 2004, 19:24
With Proposition 13, if you bought your house 11 years ago ninomoi 3 16 Nov 2004, 16:39
Display posts from previous: Sort by

With Proposition 13, if you bought your house 11 years ago

  Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Privacy Policy| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group and phpBB SEO

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.