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# In order to raise revenue, the federal government planned a

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Intern
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Re: In order to raise revenue, the federal government planned a [#permalink]

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04 Oct 2012, 07:35
According to me all answers were wrong including E. Because if state tax delinquents have forgot to pay the previous taxes, there may be high possibility that again they will forget.

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Re: In order to raise revenue, the federal government planned a [#permalink]

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04 Dec 2012, 12:40
The passage clearly mentions that federal government will NOT charge penalties. Hence comparison of penalties in choice C is irrelevant.

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Re: In order to raise revenue, the federal government planned a [#permalink]

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04 Dec 2012, 14:39
I have C for this one.

C--> Less penalties in the states implies more deliquents meaning more people to give amnesty

D--> As stated above, can be wrong if the deliquencies due to oversight can be lessened with the amnesty program.

Any thoughts?

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Re: In order to raise revenue, the federal government planned a [#permalink]

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05 Dec 2012, 04:51
5
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Hi Milan & Tomas,

Answer C is not correct in my opinion because as previously stated the fees are being abolished. The question of whether there are more or less state/federal avoiders is in my opinion just speculation.

Answer E does strengthen, because whilst Milan may have a point that SOME State avoiders will forget again, overall it is more likely that becuase people have decided consciously to break the law that they will keep that same opinion even when faced with an amnesty. If people have forgotten, they're likely to be happy with the route out of their dilemma (because they normally want/are happy to pay tax).

Hope that helps.

James
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Re: In order to raise revenue, the federal government planned a [#permalink]

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18 Aug 2013, 10:26
mymba99 wrote:
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.

I would go with C... see the catch is in conclusion.."that the federal government would collect a far lower percentage
of total tax owed by delinquents
than did state governments implementing similar
programs."

Its about percentage of owed tax..lets say I owe 1000\$ as tax and 1000\$ as federal penalty-- it makes me me paying 50% of my owed tax
In case of State tax--tax is 1000\$ and state penalty- 500%...it have to pay 66% of my owed tax.

Hope this helps.

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Re: In order to raise revenue, the federal government planned a [#permalink]

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19 Aug 2013, 03:29
rbansal6 wrote:
mymba99 wrote:
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.

I would go with C... see the catch is in conclusion.."that the federal government would collect a far lower percentage
of total tax owed by delinquents
than did state governments implementing similar
programs."

Its about percentage of owed tax..lets say I owe 1000\$ as tax and 1000\$ as federal penalty-- it makes me me paying 50% of my owed tax
In case of State tax--tax is 1000\$ and state penalty- 500%...it have to pay 66% of my owed tax.

Hope this helps.

No C does not say that; On the contrary, it implies that as fines are lower for late payment of state tax,more people will pay federal tax which has higher fines.

OA must be E; As it implies that most unlike state tax delinquents, federal tax delinquents choose not to pay taxes.
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Re: In order to raise revenue, the federal government planned a [#permalink]

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23 Aug 2013, 09:36
rbansal6 wrote:
mymba99 wrote:
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.

I would go with C... see the catch is in conclusion.."that the federal government would collect a far lower percentage
of total tax owed by delinquents
than did state governments implementing similar
programs."

Its about percentage of owed tax..lets say I owe 1000\$ as tax and 1000\$ as federal penalty-- it makes me me paying 50% of my owed tax
In case of State tax--tax is 1000\$ and state penalty- 500%...it have to pay 66% of my owed tax.

Hope this helps.

Hi,

In option C, high financial penalties and low financial penalties are stated.However, the argument clearly mentions that in order to increase revenues,
a tax amnesty program includes tax without added financial penalty.

So, there would be no financial penalty.
So if federal give no financial penalty and states gives low financial penalty, people would prefer federal governments..

So, option C is wrong.

I don't understand why option D is incorrect and Option E correct.

In option E,
We don't know the no. of federal tax delinquents fail to pay federal tax compared with the no . of state tax delinquents who fail to pay because of an oversight rather than a decision not to pay.

Can someone explain why option D is incorrect and option E the correct answer??

Thanks,
Jai
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Re: In order to raise revenue, the federal government planned a [#permalink]

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23 Aug 2013, 10:11
jaituteja wrote:
rbansal6 wrote:
mymba99 wrote:
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.

I would go with C... see the catch is in conclusion.."that the federal government would collect a far lower percentage
of total tax owed by delinquents
than did state governments implementing similar
programs."

Its about percentage of owed tax..lets say I owe 1000\$ as tax and 1000\$ as federal penalty-- it makes me me paying 50% of my owed tax
In case of State tax--tax is 1000\$ and state penalty- 500%...it have to pay 66% of my owed tax.

Hope this helps.

Hi,

In option C, high financial penalties and low financial penalties are stated.However, the argument clearly mentions that in order to increase revenues,
a tax amnesty program includes tax without added financial penalty.

So, there would be no financial penalty.
So if federal give no financial penalty and states gives low financial penalty, people would prefer federal governments..

So, option C is wrong.

I don't understand why option D is incorrect and Option E correct.

In option E,
We don't know the no. of federal tax delinquents fail to pay federal tax compared with the no . of state tax delinquents who fail to pay because of an oversight rather than a decision not to pay.

Can someone explain why option D is incorrect and option E the correct answer??

Thanks,
Jai

Hi,

It is clearly given "most delinquents" and the argument concludes lower percentage , so the number of tax delinquents is irrelevant here.

Regards,
Ramandeep
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Re: In order to raise revenue, the federal government planned a [#permalink]

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01 Sep 2013, 06:34
gmihir wrote:
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.

One for E, C does not make sense and is really out of scope. This is just a fact.

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Re: In order to raise revenue, the federal government planned a [#permalink]

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01 Sep 2013, 08:53
1
KUDOS
samatace wrote:
gmihir wrote:
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.

One for E, C does not make sense and is really out of scope. This is just a fact.

IMO its C, if delinquents are not paying for lower penalties in state, they shall certainly not pay for higher penalties in federal taxes.
For E, even if they had an oversight in state taxes, what makes it compelling that they will again have an oversight in Federal Taxes as well?

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Re: In order to raise revenue, the federal government planned a [#permalink]

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02 Sep 2013, 02:28
ygdrasil24 wrote:
samatace wrote:
gmihir wrote:
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.

One for E, C does not make sense and is really out of scope. This is just a fact.

IMO its C, if delinquents are not paying for lower penalties in state, they shall certainly not pay for higher penalties in federal taxes.
For E, even if they had an oversight in state taxes, what makes it compelling that they will again have an oversight in Federal Taxes as well?

With C we can say "ok, usually they would try to avoid paying federal taxes because of the high penalty, hence they are more likely to pay for state tax, however in this case they will not have any penalties for federal taxes". How come C is correct??

E says that they tend to be forgetful to pay state taxes, hence they will forget to pay federal tax too (or any other kind of tax), so the federal government should not count on reducing the penalty because it doesn't affect the tax payers.

I picked E btw.

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Re: In order to raise revenue, the federal government planned a [#permalink]

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12 Nov 2013, 22:23
2
KUDOS
Guys.. I think C makes sense.

C.Although federal tax delinquents usually must pay high financial penalties, the states require far lower financial penalties.

Since federal penalty was high , it was more likely that more people have paid the federal taxes on time .
However, since the penalty on state taxes was low, it was more likely that people might have overlooked or chose not to pay.

Simple reasoning: If the punishment is harsh for a particular crime then that particular crime is committed less frequently.

This implies that state might have more revenue to collect then federal government.

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Re: In order to raise revenue, the federal government planned a [#permalink]

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12 Nov 2013, 23:47
But this is a causal relationship "If the punishment is harsh for a particular crime then that particular crime is committed less frequently."
with the assumption that "All ppl commit crimes and will be punished".. Seems to be a far fetched statement.. IMO OA should be E...

Thoughts anyone???

rim200991 wrote:
Guys.. I think C makes sense.

C.Although federal tax delinquents usually must pay high financial penalties, the states require far lower financial penalties.

Since federal penalty was high , it was more likely that more people have paid the federal taxes on time .
However, since the penalty on state taxes was low, it was more likely that people might have overlooked or chose not to pay.

Simple reasoning: If the punishment is harsh for a particular crime then that particular crime is committed less frequently.

This implies that state might have more revenue to collect then federal government.

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Re: In order to raise revenue, the federal government planned a [#permalink]

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19 Jan 2014, 07:39
5
KUDOS
i will go with C. Below is the conclusion

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.

Now we need to bear in mind that no amount of tax is pardoned, only penalty is pardoned. Had there been no amnesty program, tax collected will be Original tax + penalty.
Due to amnesty both state and federal govt is going to pardon the penalty.

Only if Federal penalty is higher than state penalty, the total tax collected by federal govt will be less than state govt.
Ans choice C mentions exactly the same thing.

As for E - chosen by around 60% respondents, here is my understanding.

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.

We are looking for strengthener to conclusion : while E tells the reason for delinquency of federal and state tax..it no way gives us the reason to believe why Federal tax program will collect lesser amount.
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Re: In order to raise revenue, the federal government planned a [#permalink]

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23 Jan 2014, 08:37
whats the OA?
Can someone explain

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Re: In order to raise revenue, the federal government planned a [#permalink]

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08 Feb 2014, 16:26
Initial reasoning: The federal government will employ a tax amnesty program that is similar to state government's tax amnesty program. It is expected that the federal government would not collect any higher percentage than the state government did. Thus, if the federal program is similar to the state program, then what is the difference between those who are willing to pay delinquent taxes for the state and those who are not willing to pay delinquent taxes for the federal government? The correct answer choice establishes a distinction, whereas the wrong answer choice does not distinguish anything among them.

A. Tax amnesty programs are only successful if they are widely publicized. Out of scope. This choice also doesn't make a distinction between the federal program and the state program.

B. Most people who honestly pay their state tax are equally honest in paying their federal tax. Out of scope. The correct answer depends upon those who don't pay their state taxes or those who don't pay their federal taxes.

C. Although federal tax delinquents usually must pay high financial penalties, the states require far lower financial penalties. Shell game. This answer choices supports a different conclusion, but this one is trap because it contains similar word choice as the stimulus.

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. Out of scope. The difference among states doesn't matter, but the difference between the state program and the federal program.

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. Correct

IMO E

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Re: In order to raise revenue, the federal government planned a [#permalink]

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09 Feb 2014, 00:32
PLUMBER250

MY QUESTION -- WHY IS "D" WRONG ?

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.....WE NEED TO KNOW IF THERE IS SOME DIFFERENCE IN THE TWO TAXATIONS WHICH LED TO SOME BEING RESPONDED TO AND SOME TO LESSER EXTENT......MAY BE THE FEDERAL TAX RATE IS MUCH HIGHER THAN THAT OF SOME STATES TAXATION, HENCE PEOPLE - THOUGH RECIPROCATE TO THE STATE TAX DO NOT DO SO FOR THE FEDERAL TAXES.....

THANKX.....

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Re: In order to raise revenue, the federal government planned a [#permalink]

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09 Feb 2014, 08:22
semwal wrote:
PLUMBER250

MY QUESTION -- WHY IS "D" WRONG ?

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.....WE NEED TO KNOW IF THERE IS SOME DIFFERENCE IN THE TWO TAXATIONS WHICH LED TO SOME BEING RESPONDED TO AND SOME TO LESSER EXTENT......MAY BE THE FEDERAL TAX RATE IS MUCH HIGHER THAN THAT OF SOME STATES TAXATION, HENCE PEOPLE - THOUGH RECIPROCATE TO THE STATE TAX DO NOT DO SO FOR THE FEDERAL TAXES.....

THANKX.....

D is go far away because as you said, ..MAY BE THE FEDERAL TAX RATE IS MUCH HIGHER THAN THAT OF SOME STATES TAXATION. What if the situation looks like this:

the tax rate of the state is A 60% B 20% C 80% D 30% (ave 47.5%) and the tax rate of the federal is 40%.

Yeah this is the opposite of your premise, but this one surely weaken your statement.

Besides, THE POINT HERE is NOT about the tax rate, you can't assume that the higher the tax rate, the lower percentage of people to pay the tax. In the stem we can't see this assumption.

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.

While E explain or narrow the problem.Using comparison to state that the reason why people in STATE do not pay tax:OVERSIGHT, i,e, they are more likely to pay because they are not mean to delinquent.

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Re: In order to raise revenue, the federal government planned a [#permalink]

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05 Mar 2014, 21:37
1
KUDOS
btw, the OA is E. I found this in the gmat prep practice exam 3. I got it wrong though .

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Re: In order to raise revenue, the federal government planned a [#permalink]

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06 Mar 2014, 02:59
So the answer for this is E?

I believe E makes more sense because it gives a strong reason that state tax delinquents failed to pay not because they choose to be penalized by whichever amount that is lower but rather an oversight on their part. So even if federal taxes are reduced, it would encourage more delinquents to pay fed taxes and not state taxes.

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Re: In order to raise revenue, the federal government planned a   [#permalink] 06 Mar 2014, 02:59

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