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With Proposition 13, if you bought your house 11 years ago [#permalink]

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07 Dec 2009, 01:03

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A

B

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D

E

Difficulty:

(N/A)

Question Stats:

23% (02:41) correct
77% (02:08) wrong based on 10 sessions

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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 (B) If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.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 (D) If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates.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.

Re: Very close options : Need explanation [#permalink]

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07 Dec 2009, 01:27

It's an inference quest, so the answer should be very soft. Avoid extreme words.

A. unconstitutional? No

B. Tempting. But, market price could drop significantely. Notice word EVERY in B. One could buy a house for 200.000 five years ago, and now it costs 150.000. In this case B falls apart. OUT

C. Infation is not a main subject here. OUT

D. Market price for houses could be the same as inflation. In this case D falls apart.

E. Very accurate conclusion. I think, it's an answer.

Re: Very close options : Need explanation [#permalink]

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10 Dec 2009, 21:21

papillon86 wrote:

The OA for this is B. But i'm not convinced not one bit.

If he can talk about repealing then what makes D incorrect. What exactly in the argument has helped u guys to narrow it down to B or E? Plz explain

Folks can we discuss this plz? I wud really appreciate only 8 days left for my GMAT and such questions are just tearing down my confidence

Option (E) is wrong because, "Proposition 13 is not going to help some homeowners more than others - both the homeowner will pay 1% of the property as a tax".
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Re: Very close options : Need explanation [#permalink]

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15 Dec 2009, 22:14

papillon86 wrote:

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.

I'd seen this recently and chose E (spend around 4-5 mins on the Q too! so was disappointed to see OA: B) "1 percent of $75,000 increased by 2 percent each year for 11 years" is the statement that threw me off-track and approx. calculated for 11 yrs. the cheaper house showed higher taxes compared to $6000x11yrs.

If we just look at $914 and $2000 then, B makes sense as both of them have substantial increase to $6000. Thats the logic for B i guess.

Re: Very close options : Need explanation [#permalink]

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16 Dec 2009, 17:05

What a terrible question .. the answer should be B

(A) Proposition 13 is unconstitutional because it imposes an unequal tax on properties of equal value. This is not true because properties are not of equal value. What you paid 11 years back is not equal to the amount of 200,000$ today. (B) If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes. Yes, this is very clear. 6000$ is a substantial increase from 2000$ and from the argument's perspective every homeowner will incur this charge. (C) By preventing inflation from driving up property values, Proposition 13 has saved homeowners thousands of dollars in property taxes. This is completely out of scope. (D) If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates. Again no mention of 'different' tax rates and that cannot be inferred either. (E) Proposition 13 has benefited some homeowners more than others. We cannot conclude this at all. There's only a comparison of 'identical homes' .. so we cannot generalize and say 'some are benefited more than the others'.
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Re: Very close options : Need explanation [#permalink]

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29 Jan 2010, 14:50

Author gives fact about two similar properties with same price and different tax. Also he states that without prop 13 both of the house owners will be paying same amount. A- Constitutionality is not discussed. B- Looks like a candidate but too extreme in using word "EVERY" C- prevention of inflation is not authors intent, he is trying to compare two neighbors affected by prop 13 D- It is a not about repealing prop 13 either. E - This is a conclusion that fill be attested by the above mentioned premises. my choice is E

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