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In order to raise revenue, the federal government planned a tax amnesty program that allows tax delinquents to pay all owed tax without added financial penalty. However, economists projected that the federal government would collect a far lower percentage of total tax owed by delinquents than did state governments implementing similar programs. Which of the following, if true, would most contribute to an explanation of the economists’ projections? A. Tax amnesty programs are only successful if they are widely publicized. B. Most people who honestly pay their state tax are equally honest in paying their federal tax. C. Although federal tax delinquents usually must pay high financial penalties, the states require far lower financial penalties. D. The state tax rate varies considerably from state to state, but the federal tax is levied according to laws which apply to citizens of all the states. E. Unlike most federal tax delinquents, most state tax delinquents fail to pay state tax because of an oversight rather than a decision not to pay.
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I consider only C/E closely. C states that X had high penalties, Y had low penalties=> both have 0 penalty now. E if most ppl defaulted on Y due to oversight, they would now pay it because of 0 penalty.
I consider only C/E closely. C states that X had high penalties, Y had low penalties=> both have 0 penalty now. E if most ppl defaulted on Y due to oversight, they would now pay it because of 0 penalty.
Reminds me of taxes now.....argh....
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My argument
C is out of scope as penalties are being forgiven
What makes you think that tax delinquents only default federal taxes willfully and state taxes by oversight? I just dont get it.
Which of the following, if true, would most contribute to an explanation of the economists’ projections?
E. Unlike most federal tax delinquents, most state tax delinquents fail to pay state tax because of an oversight rather than a decision not to pay.
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ha ha haa GMAT has the big momma of all the CYA's
I sincerely disagree though and picked D.
D is a better reason because it is possible that there are states with very low tax rate and the required amount needed to pay is also not painful enough to the willful delinquents. Thats why the states will have more percentage paid compared to the federal tax.
D. The state tax rate varies considerably from state to state, but the federal tax is levied according to laws which apply to citizens of all the states.
Does not explain why more people payed more state taxes than federal taxes... the second part does not indicate why people paid less federal tax.
D. The state tax rate varies considerably from state to state, but the federal tax is levied according to laws which apply to citizens of all the states.
Does not explain why more people payed more state taxes than federal taxes... the second part does not indicate why people paid less federal tax.
Why do you think E is wrong?
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Never mind. I was misreading the state taxes vary from state to state as state taxes vary from federal taxes and are generally lower than the fed taxes.
Another problem of introducing known information. that would have been a better answer if it were there. I guess I came up with that reason before I even read the choices and got totally blinded. Oh well! that sucks.
OA is E.
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