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Aroca County s public schools are supported primarily by

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Re: Aroca County s public schools are supported primarily by [#permalink]

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New post 30 Sep 2016, 05:15
kawaljeet wrote:
Any1 who can explain why E is wrong...
It also suggest that sales tax will not be decreased and thereby giving the strong point to conclude that sales tax will not be low.

Thanks in advance.


The argument says the amount of money we are getting from 3% tax is less than the amount of money we are getting from Property taxes.

Conclusion : The amount currently going via Property tax will not reduced even after the implementation of new plan.

So, even if they are not likely to reduce the price, still we will get the same money, which will be less than what is required. So, it has no effect on the conclusion.

B clearly states that a new shopping complex is going to open. Hence, may be more sales and more money. hence B is correct and E is incorrect.
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Aroca County s public schools are supported primarily by [#permalink]

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New post 04 Oct 2016, 04:29
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Actually IMO it might reduce(those ppl who do not pay property tax might also not pay sales tax for even more number of items they buy.In that case the amount to be given to the school will reduce) and it might not also(those who are not paying for property taxes since they are living in rented homes or something will necessarily have to pay for sales tax for whatever items they buy).

I'm not saying option B is wrong but I cant understand why option B is preferable over D? :?
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Re: Aroca County s public schools are supported primarily by [#permalink]

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New post 27 Nov 2016, 06:24
For people who are stumbling between B and C, the conclusion says that, "The money going to the county schools will not reduce because..."
B : Talks about the offsetting the funds that will get displaced by the new plan
C : Doesn't talk about offsetting the funds, but agrees that reduction in funding is Okay. This is not what completes the problem statement.
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Aroca County s public schools are supported primarily by [#permalink]

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New post 11 Jan 2017, 00:01
A. People leaves->Property tax reduces -> funding reduces. Does not mention what bearing does Sales Tax have. OUT
B. New shopping mall ->new sales -> more sales Tax. KEEPER
C. Premise specifically says Aroca County’s public schools. So C is Out of Scope. OUT
D. Don't own home->No influence over funding. Does not mention what bearing does Sales Tax have . OUT
E. Tempting, but it is in fact an opposite answer, a trap. Such action by retailers would reduce Sales Tax->reduce funding. OUT

POE: B
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Re: Aroca County s public schools are supported primarily by [#permalink]

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New post 17 Jan 2018, 09:49
kawaljeet wrote:
Any1 who can explain why E is wrong...
It also suggest that sales tax will not be decreased and thereby giving the strong point to conclude that sales tax will not be low.

Thanks in advance.


Option E is actually tough to decipher and I too got stumbled even after reading OE. Still let me try in my own words.

retailer in ..... are not likely to abosrb the sales tax by reducing the pretax price of their goods.

Now not likely means an emphatic way of saying NO. So we can consider that Retailer are not going to decrease pretax prices. So it signifies two things that retailers can do- either increase price or keep it constant.

When price is kept constant, sales tax at 3%. Total price will remain constant So constant sales tax revenue , among other things kept constant{such as no increase in customers, government incentive etc.} , will not compensate for reduction in property tax revenue.

When price is increased, sales tax at 3%. Total price will increase. Total sales may increase among other things kept constant {such as no increase in customers, government incentive etc.}. Now increased price may decrease foot fall because customer will get more incentive if they purchase products from nearby county. So total revenue generated from Salex tax will be less.

Now one can also have a case - even after price increase customer buy products from Aroca county only but certainly it would be rare.

So overall this option is inferior to option B in which explicit co-relation is produced between more customers and more revenue.

R.
Re: Aroca County s public schools are supported primarily by   [#permalink] 17 Jan 2018, 09:49

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