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

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

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04 May 2008, 12:22
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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.
[Reveal] Spoiler: OA

Last edited by mikemcgarry on 13 Nov 2017, 12:09, edited 2 times in total.
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Re: In order to raise revenue, the federal government planned a [#permalink]

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04 May 2008, 12:43
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saravalli 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.

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

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04 May 2008, 12:55
i think E as well

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

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07 May 2008, 22:17
OA?
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Re: In order to raise revenue, the federal government planned a [#permalink]

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07 May 2008, 23:55
E too,

I am really bad at this kind of question! Now my rule only is reading choice and eliminate according to the feeling. I know this skills risky. Do you have any tips?
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Re: In order to raise revenue, the federal government planned a [#permalink]

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08 May 2008, 06:35
OA: E Thanks

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

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08 May 2008, 10:03
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sondenso wrote:
E too,

I am really bad at this kind of question! Now my rule only is reading choice and eliminate according to the feeling. I know this skills risky. Do you have any tips?

Fist break out the premises and conclusion

Premise:
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.

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.

Which of the following, if true, would most contribute to an explanation of the
economists’ projections?

So we want to strengthen the argument that if the federal governemnt implements the same program they will collect lower taxes than what the state government did.

So before looking at the questions think for a second what you need. The answer should show why people would pay back more state taxes then they would federal taxes.

If you alread have this in mind before looking at the answers then you wont get distracted easily.

A. Tax amnesty programs are only successful if they are widely publicized.

Does this give a reason why people would pay back state tax but not federal tax? No, so move on.

B. Most people who honestly pay their state tax are equally honest in paying their
federal tax.

This addresses people paying state and federal tax but it argues the opposite and weakens.

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

The fees will be abolished so this is irrelevant.

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.

Doesn't address why people would pay more of one over the other.

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.

Bingo! The people who do not pay their state tax do so because they forget not because they were unwilling. These peopel would surely pay once they are reminded and given the opportunity to do it penalty free. It also implies that dont pay federal tax do so because they intentionally dont want to. These people are far less likely to repay once penalties are removed because they didn't want to pay in the first place when there were no penalties.

If you already have an ideal of what your looking for it is easier to spot in a crowd than if you just go through them one by one and decide if they make sense or not.

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

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08 May 2008, 18:54
I choose E.
Good question.

The choices narrow down to C or E.
But C talks about federal tax penalty while the premise states that the proposal will not impose penalty.
E states that people do not wish to pay federal tax irrespective of the incentive offered.

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

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01 May 2012, 21:07
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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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Re: In order to raise revenue, the federal government planned a [#permalink]

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01 May 2012, 22:31
Are you sure that the OA is C? IMO, it is E.

The federal government will receive less money than the states because the deliquents don't want to pay federal taxes.
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Re: In order to raise revenue, the federal government planned a [#permalink]

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01 May 2012, 22:44
E should be it IMO..fact undermining C has been provided in the argument..

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

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01 May 2012, 23:02
E should be it. C is irrelevant
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Re: In order to raise revenue, the federal government planned a [#permalink]

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01 May 2012, 23:24
thanks guys for confirming, i also had marked E , C makes little sense..just wanted to have a second opinion, to make sure i haven't missed anything, thanks again!

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

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02 May 2012, 06:15
gmihir wrote:
thanks guys for confirming, i also had marked E , C makes little sense..just wanted to have a second opinion, to make sure i haven't missed anything, thanks again!

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

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02 May 2012, 09:56
Yes... C makes no sense at all....

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

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06 May 2012, 09:26
hi all,

Though i selected E too, after looking at the answer i am little confused now.

In E, it is mentioned that the state tax deliquents are usually those who dont pay because of oversight. if that were true, a state tax amnesty program wouldnt have any special benefit because those people would have paid either way without needing any additional incentives. Hence, there is no reason why a federal program would be less successful than a state one.

Am i wrong in my approach? Can someone clarify pls?

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

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19 May 2012, 20:59
tsheshraj wrote:
hi all,

Though i selected E too, after looking at the answer i am little confused now.

In E, it is mentioned that the state tax deliquents are usually those who dont pay because of oversight. if that were true, a state tax amnesty program wouldnt have any special benefit because those people would have paid either way without needing any additional incentives. Hence, there is no reason why a federal program would be less successful than a state one.

Am i wrong in my approach? Can someone clarify pls?

This argument is assuming that people who forgot to pay state taxes would be reminded and encouraged by state amnesty program to pay Taxes without penalty. Because these people didn't want to default on State Taxes, would pay the taxes more easily than people who defaulted on Federal Taxes.
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Re: In order to raise revenue, the federal government planned a [#permalink]

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23 May 2012, 02:34
After spending more than 5 minutes on this question, I am convinced that the answer is E.
Great question.

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

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25 Jul 2012, 06:56
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(C) clearly states that the federal penalties were higher than that of the state penalties so the delinquent cases found the offer good enough to repay the federal one.
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Re: In order to raise revenue, the federal government planned a [#permalink]

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25 Jul 2012, 08:22
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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.

So, I think most tax delinquents don't pay fed taxes because they decide not to, or simply put, don't want to pay.
Those who don't pay state taxes are mostly forgetting to pay, not because they don't want to pay.
Two different attitudes, why should the same method work for both?

I think it is E.
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Re: In order to raise revenue, the federal government planned a   [#permalink] 25 Jul 2012, 08:22

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