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# For the third year in a row, the town of Springdale is experiencing a

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Joined: 15 Jan 2018
Posts: 612
Concentration: General Management, Finance
GMAT 1: 720 Q50 V37
For the third year in a row, the town of Springdale is experiencing a  [#permalink]

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02 Mar 2019, 22:58
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Difficulty:

35% (medium)

Question Stats:

70% (02:07) correct 30% (02:19) wrong based on 77 sessions

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For the third year in a row, the town of Springdale is experiencing a shortfall in its school budget. The town council has proposed raising the funds to meet this year's needs by increasing the meals tax charged by local restaurants from 5 to 7.5 percent. While it is certainly necessary to raise additional funding for Springdale's schools, the town council's current plan is ill-advised. A significant percentage of Springdale's restaurant clientele are tourists, who will derive no benefits from improved schools in Springdale.

Which of the following, if true, would cast the most doubt on the effectiveness of the town council's plan to address the Springdale school budget shortfall by raising the local meals tax?

A. According to the town's bylaws, any proposed tax increase must be put through a public vote during a general election, which could delay the implementation of the new tax by several months.

B. To ensure compliance with the new rate, the town will have to employ additional auditors to review restaurants' quarterly tax filings.

C. Managers of local chain and franchise restaurants cannot revise menu prices without permission from their parent companies.

D. The last time the meals tax was raised in Springdale, restaurants reported a 15 percent decrease in revenues during the first year following the increase, while those in neighboring towns experienced increases as much as 25 percent.

E. The Springdale Merchant's association, to which most local restaurant owners belong, is strongly opposed to the increase.

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Re: For the third year in a row, the town of Springdale is experiencing a  [#permalink]

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05 Mar 2019, 00:29
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For the third year in a row, the town of Springdale is experiencing a shortfall in its school budget. The town council has proposed raising the funds to meet this year's needs by increasing the meals tax charged by local restaurants from 5 to 7.5 percent. While it is certainly necessary to raise additional funding for Springdale's schools, the town council's current plan is ill-advised. A significant percentage of Springdale's restaurant clientele are tourists, who will derive no benefits from improved schools in Springdale.

Which of the following, if true, would cast the most doubt on the effectiveness of the town council's plan to address the Springdale school budget shortfall by raising the local meals tax?

A. According to the town's bylaws, any proposed tax increase must be put through a public vote during a general election, which could delay the implementation of the new tax by several months.

B. To ensure compliance with the new rate, the town will have to employ additional auditors to review restaurants' quarterly tax filings.

C. Managers of local chain and franchise restaurants cannot revise menu prices without permission from their parent companies.

D. The last time the meals tax was raised in Springdale, restaurants reported a 15 percent decrease in revenues during the first year following the increase, while those in neighbouring towns experienced increases as much as 25 percent.

E. The Springdale Merchant's association, to which most local restaurant owners belong, is strongly opposed to the increase.

The right answer is D. The question asks us to pick something that weakens the conclusion, and with any such CR question, part of the challenge is to correctly identify the conclusion. In this case, it is that increasing the meal tax will raise funds for the schools. Any other info, such as whether the restaurants will do well, or who will benefit or be hurt aside from the schools, is irrelevant.
Hence, what we want to look for is anything that suggests this tax will not raise money for the school.

Option A - This is about a delay in implementing the tax, not whether the tax will work. Irrelevant and therefore OUT

Option B - Again, it's about a complication in implementing the tax, not whether it will work. Irrelevant and therefore OUT

Option C - Gonna sound like a stuck record, but this is once again an option about implementing the tax. Irrelevant and therefore OUT

Option D - This links the outcome of raising a tax with decreased revenue. This suggests that if done again, the revenue, and therefore tax revenue would drop, resulting in less money raised for the schools. This actually addresses the conclusion and is therefore CORRECT

Option E - This simply suggests the restaurants may not benefit from this tax being put in place. However, we don't care about this since the primary focus is solely on whether it would raise money for schools or not. OUT

With any question related to strengthening or weakening the conclusion, one of the common traps the GMAT places is to obscure the exact conclusion with irrelevant data. Once this trap is identified, the task becomes a whole lot easier!

- Matoo from CrackVerbal
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Re: For the third year in a row, the town of Springdale is experiencing a   [#permalink] 05 Mar 2019, 00:29
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