Property taxes are typically set at a flat rate per $1,000 of official

Question

Property taxes are typically set at a flat rate per $1,000 of officially assessed value. Reassessments should be frequent in order to remove distortions that arise when property values change at differential rates. In practice, however, reassessments typically occur when they benefit the government—that is, when their effect is to increase total tax revenue.

If the statements above are true, which of the following describes a situation in which a reassessment should occur but is unlikely to do so?

(A) Property values have risen sharply and uniformly.

(B) Property values have all risen—some very sharply, some less so.

(C) Property values have for the most part risen sharply yet some have dropped slightly.

(D) Property values have for the most part dropped significantly; yet some have risen slightly.

(E) Property values have dropped significantly and uniformly.

If most property values have dropped significantly, but some have risen slightly, a reassessment should occur (since values have changed at different rates) but is unlikely (since it will not benefit the government). Thus choice D describes the required situation and is the best answer.

According to the passage, choices A and E describe the situations in which there is no need for a reassessment, since change has occurred uniformly. Similarly, choices B and C both describe situations in which a reassessment should occur, and is likely to, since the government will benefit.

KarishmaB · Accepted Answer

You might have come across mimic questions. You are given a particular argument and you have to find another argument which uses the same logic or you are given a situation and you have to find examples of that situation etc. This is a type of mimic question. 
Understand the argument:
Property taxes are set at a flat rate per $1,000 of officially assessed value. 
When property values change at differential rates, reassessment should happen. 
In practice, reassessments occur when they increase total tax revenue.

When will total tax revenue increase? When the total assessed value increases. 
Reassessments are needed when property values change at differential rates (rates of some properties go up, for some go down or for some go up steeply and for some go up slightly). But they will probably happen only when overall, the reassessed value will be higher than previous value (and when values change at differential rate)

In part D, the values have changed at differential rates so reassessment should happen. But the reassessed value will be lower than the current value so it will probably not happen.

Answer D

mikeCoolBoy · Answer

IMO the best you can do is to diagram the stimulus

property values change at differential rates ---> Reassessments should occur

In reality

a reassessment has occurred ---> is likely that the reassessment has benefited the government, increasing the total revenue

If the statements above are true, which of the following describes a situation in which a reassessment should
occur but is unlikely to do so?

The key to this problem is to rephrase the question

a situation in which a reassessment should occur, the property values should change at different rates.
the reassessment is unlikely to do --> the reassessment won't benefit the government ---> the reassessment won't increase the total revenue

so you are looking for an answer in which the property values change at different rates but in which they don't increase the total revenue

(A) Property values have risen sharply and uniformly.

Eliminate this because the rates are not different

(B) Property values have all risen – some very sharply, some less so.

All the property values have risen, so they have increased the total revenue. out

(C) Property values have for the most part risen sharply yet some have dropped slightly.

This is results in an increase of the revenue. out

(D) Property values have for the most part dropped significantly; yet some have risen slightly.

Correct. Different rates and in global the revenue has decreased

(E) Property values have dropped significantly and uniformly.

not different rates

Bunuel · Answer

OFFICIAL EDXPLANATION

If most property values have dropped significantly, but some have risen slightly, a reassessment should occur (since values have changed at different rates) but is unlikely (since it will not benefit the government). Thus choice D describes the required situation and is the best answer.

According to the passage, choices A and E describe the situations in which there is no need for a reassessment, since change has occurred uniformly. Similarly, choices B and C both describe situations in which a reassessment should occur, and is likely to, since the government will benefit.

crejoc · Answer

two statements from the argument
stmt1: Reassessments are mad when property values 
change at differential rates

From stmt1,
change at differential rates==> increase as well as decrease of property rates

stmt2: Reassessments occur when they benefit government to increase total tax revenue

From stmt2,
to increase total tax revenue, most property values must increase. the question is when reassessment needed but it is not done by government, then it implies most property values decrease. 
D clearly explains of most property value decreaese and some rise to prove stmt1 that reassessments are needed.

A. no differential rates so no reassessments needed

B. no differential rates , all have risen

C. differential rates are there so one condition is met, but most property values risen , then it would benefit government and reassessment would occur ( for us reassessment should not occur)

E. same as A no differential rates so no reassessments needed

Vips0000 · Answer

"a situation in which a reassessment should occur but is unlikely to do so"

Reassessment should occur when property value changes at differential rates - A & E out
among B,C and D, only D provides a case where new taxes would be lower if reassessment is done. So it is highly unlikely that the reassesment would be done. (reassessments typically occur when they benefit the government).

Hence Ans D it is!

MacFauz · Answer

Rates must have increased ununiformly or decreased ununiformly or there should have been increase in certain areas and decrease in other areas. So only B,C & D remain. Reassessment will not occur unless there has been more increase than decrease. So only D stands the test.

Kudos Please... If my post helped.

Kudos Please... If my post helped.

semwal · Answer

WE HAVE TO LOOK FOR A SCENARIO WHERE SITUATION DEMANDS REASSESSMENT DUE TO PROPERTY VALUE CHANGES AT  DIFFERENTIAL RATES  YET GOVERNMENT NOT IMPLEMENTING IT AS IT DOES NOT BENEFIT BUT RATHER LOSES.....

If the statements above are true, which of the following describes a situation in which a reassessment should occur but is unlikely to do so?

Property values have risen sharply and uniformly. NO DIFFERENTIAL FACTOR....HENCE NOT APPLICABLE

Property values have all risen—some very sharply, some less so.  GOVERNMENT BENEFITTING AND WILL GO FOR REASSESSMENT

Property values have for the most part risen sharply; yet some have dropped slightly. DIFFERENTIAL RATES ARE THERE BUT GOVERNMENT BENEFITTING AND WILL GO FOR REASSESSMENT

Property values have for the most part dropped significantly; yet some have risen slightly.... .DIFFERENTIAL RATES APPLICABLE BUT GOVERNMENT WILL NOT GO FOR REASSESSMENT AS IT WILL BE AT LOSS...

Property values have dropped significantly and uniformly...... NO DIFFERENTIAL FACTOR....HENCE NOT APPLICABLE

KUDOS IF YOU PLEASE.....

SamuelWitwicky · Answer

Karishma I really don't get understand this question at all. In option B, if ALL property values have gone up, why would the government even want to do a re-assessment? Their tax revenues will have all increased! Some help please?

KarishmaB · Answer

There are two different property values - market value and appraised value

Market value is what changes every day and with every deal - e.g. it could be considered the last transaction value of a fair negotiation not committed under duress. Or it could be the average of last 3 transactions or some such formula etc. It is not fixed.

Property tax taken by the govt cannot be calculated using market value because of the huge short term fluctuations. They use assessed value of a property for a certain period of time, say 2 yrs. They can reassess after 2 yrs and then use that as a base. Or they can choose to reassess when they feel that the market price has moved up/down for the long term etc.

The argument tells you how the govt decides to reassess. The property tax will increase if the reassessed value is higher than previous value. An increase in market value does not increase property tax.

CEdward · Answer

Property taxes are typically set at a flat rate per $1,000 of officially assessed value. Reassessments should be frequent in order to remove distortions that arise when property values change at differential rates. In practice, however, reassessments typically occur when they benefit the government—that is, when their effect is to increase total tax revenue.

If the statements above are true, which of the following describes a situation in which a reassessment should occur but is unlikely to do so?

(A) Property values have risen sharply and uniformly. X
-The passage tells us that reassessments should be done to remove distortions that arise when property values change at DIFFERENTIAL RATES…if the rise is occurring uniformly that’s not the same as differentially

(B) Property values have all risen—some very sharply, some less so.
-‘all risen sharply’ is not differential

(C) Property values have for the most part risen sharply yet some have dropped slightly.
-Why is C incorrect but D isn’t? The answer lies in understaning a key point in the passage: “however, reassessments typically occur when they benefit the government—that is, when their effect is to increase total tax revenue” To ensure fairness, reassessments should not be biased by the motives of government…i.e. the property taxes should be commensurate with the property values …but we know the government is pesky so they only do the reassessment when it benefits…
-so when the property values have risen you can expect the government to do a reassessment
-however, this is not a reassessment that SHOULD occur but is UNLIKELY to do so …the government would have reassessed anyways

(D) Property values have for the most part dropped significantly; yet some have risen slightly. 
Correct
-however, this is not a reassessment that SHOULD occur but is UNLIKELY to do so
-the government does not have any incentive to do a reassessment when property values are down …

(E) Property values have dropped significantly and uniformly.
-uniformly is not differentially

Crytiocanalyst · Answer

(A) Property values have risen sharply and uniformly.
This will make them reaases the situation since it will raise the profit margin for government

(B) Property values have all risen—some very sharply, some less so.
This will lead to revaluation depending on the exact numbers

(C) Property values have for the most part risen sharply yet some have dropped slightly.
Since more no of property has increased than decreased this will significantly raise the profit margin therefore reassesment will be completed

(D) Property values have for the most part dropped significantly; yet some have risen slightly.
Yes this will lead to loss to the government hence will not be revaluvated

(E) Property values have dropped significantly and uniformly.
This will also not make them not reevaluvate
i chose D i have no absolute reason to eleminate E though

soondoobu · Answer

Crytiocanalyst  E should be eliminated because of the word "uniformly" in the answer choice. the stem states that "Reassessments should be frequent in order to remove distortions that arise when property values change AT DIFFERENTIAL RATES." If property values are dropping uniformly, it does not meet the requirement for it to be reassessed.

SomeOneUnique · Answer

Let us first analyze the given argument. 
1. Government has fixed tax rate. Suppose, fixed tax rate is $x for every $1,000 of property value.
=> If a property costs $500,000 then as per fixed tax rate government will receive some money as tax revenue (income).
=> Money government would receive is ($500,000 * x)/($1,000) i.e. $500x. 
2. Property values change with market value.  New property value should be calculated after any change.  (Government calculates the property value.)
3. In reality, new property value is not calculated until government makes significant money as tax revenue (income). (IMO probably because government has to invest significant money to conduct the assessments. Thus, government does not carry out the process until it is economically beneficial to it.)

Given the above mentioned details, we have to pick an answer that describes a specific scenario.
Scenario is:  Government should  conduct the assessment  but will not conduct the assessment .

When the government is expected to carry out assessment ?
=>  When property values have changed.

When the government, in reality, carries out the assessment ?
=> The government is reluctant to carry out the assessment if it does not have much to gain.
=> Thus government carries out assessment when  net output is money as tax revenue .

Let us scan each answer choice one by one.
 (A) Property values have risen sharply and uniformly. 
This will increase the money as tax revenue to government.
Hence, gov. is expected to carry out the assessment and is likely that  gov. would do so .

(B) Property values have all risen—some very sharply, some less so. 
Similar to A, this also will increase the money as tax revenue to government.
Hence, gov. is expected to carry out the assessment and is likely that  gov. would do so .

(C) Property values have for the most part risen sharply yet some have dropped slightly. 
Property values have changed surely, although we do not know what is the net output. Is it gain or loss ?
Hence, gov. is expected to carry out the assessment, and is likely that  gov. would do so .

(D) Property values have for the most part dropped significantly; yet some have risen slightly. 
Property values have changed so gov. is expected to carry out the assessment.
However, the net output here would be negative because majority of the change is drop - represented by 'significant'.
Only a little has risen.
Hence,  gov. is expected to carry out the assessment because values have changed, but may not do so because it net output is not money as tax revenue .  CORRECT

(E) Property values have dropped significantly and uniformly. 
If property values have dropped then that is a loss making scenario, in which gov. does not have much to gain.
Hence, gov. is NOT expected to carry out the assessment, and is likely that  gov. would NOT do so .

gmatimothy · Answer

Gemmie · Answer

(A) Property values have risen sharply and uniformly. 
No distortions; reassessment benefits the government by increasing revenue. Likely to occur.

(B) Property values have all risen—some very sharply, some less so. 
Differential changes create distortions; reassessment would increase revenue. Likely to occur.

(C) Property values have for the most part risen sharply yet some have dropped slightly.  
Differential changes create distortions; reassessment would likely increase revenue. Likely to occur.

(D) Property values have for the most part dropped significantly; yet some have risen slightly.  
Differential changes create distortions; reassessment would decrease revenue. Unlikely to occur.

(E) Property values have dropped significantly and uniformly. 
No distortions; reassessment would decrease revenue. Not warranted and unlikely to occur. Not about differential changes.

siddharth_ · Answer

I misunderstood the question and thought that the reassessment here means revisiting the tax rate. As a result the entire question reverses in meaning. Since then the reassement needs to be done when the property value decreases, to adjust for the decreasing tax revenues. Ended up choosing B.

Leaving this here so that someone else (confused like me) can benefit from this.

The question explicitly mentions tax rate is flat and what's getting reassessed is the official value of the property. Now this would be reassessed only when the market value increases to increase the total tax revenue for the govt. Also, disruptions are required, hence D.

wihey6 · Answer

The correct answer is (E). Reassessments typically happen when they benefit government revenues through increased property taxes. In scenario (E), all property values drop significantly and uniformly, thus lowering assessed values and consequently tax revenues. Like interest earned from a Cash ISA, reassessment in this case doesn't financially incentivize the government, making reassessment necessary but unlikely to occur.

ChiranjeevSingh · Answer

Passage Analysis

Property taxes are typically set at a flat rate per $1,000 of officially assessed value.

This sentence tells how property taxes are determined. Let's break down the phrase "flat rate per $1,000 of officially assessed value" with an example. If the flat rate is, say, $5, it means the property tax is $5 for every $1,000 of the property's assessed value. So, if a property is officially assessed at $10,000, the tax would be ($10,000 / $1,000) * $5 = 10 * $5 = $50. In essence, the property tax is directly proportional to the property's value.

To put this in more familiar terms, a tax of $5 per $1,000 is simply a percentage. A tax of $5 on $1,000 is a rate of (5 / 1000) * 100% = 0.5%. So, the tax rate is 0.5% of the assessed value.

Another nuance is the term "officially assessed value." This means the tax is based on the value of the property as determined by the government's assessment, which may not be the same as the actual market value of the property.

Reassessments should be frequent in order to remove distortions that arise when property values change at differential rates.

The use of the phrase " should be " indicates that the passage is recommending frequent reassessments as a best practice under certain conditions. The condition is when property values change at " differential rates "—meaning, values change unevenly across different properties.

To understand the " distortions " this creates, let's use an example. Imagine two properties, A and B, both originally assessed at $100,000. With a tax of $5 per $1,000, both owners pay a tax of $500. Now, suppose the market changes: 
 
  The value of Property A  doubles  to $200,000.  
  The value of Property B is  halved  to $50,000.

Without a reassessment, both owners continue to pay $500 in tax. But now, the tax as a percentage of the property's actual value is dramatically different. 
 
  For Property A: The tax rate is now ($500 / $200,000) =  0.25% .  
  For Property B: The tax rate is now ($500 / $50,000) =  1.0% .

The owner of the less valuable property (B) is now paying a tax rate that is  four times higher  than the owner of the more valuable property (A). This unfairness is the "distortion." It could also distort the market, as potential buyers would be reluctant to purchase Property B due to its disproportionately high tax burden relative to its value. A reassessment is recommended to fix this.

In practice, however, reassessments typically occur when they benefit the government—that is, when their effect is to increase total tax revenue.

This sentence presents the actual, practical reason for reassessments, which contrasts sharply with the recommended reason. The government's decision is not based on fairness but on financial gain. A reassessment is only done when it will lead to an  increase in the total tax money collected . This implies that if a reassessment would cause the total tax revenue to go down or even stay the same, the government has no incentive to carry it out.

Deconstructing the Question

The question asks us to find a situation that meets two specific criteria from the passage: 
 
   A reassessment    should    occur:  Based on the second sentence, this means property values must have changed at  differential rates .  
   A reassessment is    unlikely    to occur:  Based on the third sentence, this means the overall effect of the reassessment would be a  decrease in or no change to total tax revenue .

Our task is to find the answer choice that combines these two conditions: an uneven change in property values and an overall drop in value (which would lead to a decrease in tax revenue).

Options Evaluation

(A) Property values have risen sharply and uniformly.

Incorrect.    This option fails the first condition. A "uniform" change means there are no distortions, so a reassessment is not needed for fairness.

(B) Property values have all risen—some very sharply, some less so.

Incorrect.    This meets the first condition (differential rates). However, it fails the second. Since all values rose, a reassessment would increase tax revenue, making it likely to happen.

(C) Property values have for the most part risen sharply yet some have dropped slightly.

Incorrect.    This meets the first condition (differential rates). However, it fails the second. Since most values rose sharply, the net effect is more tax revenue, making a reassessment likely.

(D) Property values have for the most part dropped significantly; yet some have risen slightly.

Correct.    This choice satisfies both conditions. The change is at differential rates, so a reassessment should occur to ensure fairness. But since the overall trend is a significant drop in value, a reassessment would lead to a decrease in total tax revenue, making it unlikely that the government would perform one.

(E) Property values have dropped significantly and uniformly.

Incorrect.    This option fails the first condition. Since the change is "uniform," there are no distortions that need to be corrected according to the passage's logic.

Property taxes are typically set at a flat rate per $1,000 of official

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Property taxes are typically set at a flat rate per $1,000 of official

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