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

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Re: Property taxes are typically set at a flat rate per $1,000 of official [#permalink]

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New post 06 Oct 2015, 19:55
carcass wrote:
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?


Property values have risen sharply and uniformly.

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

Property values have for the most part risen sharply; yet some have dropped slightly.

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

Property values have dropped significantly and uniformly.

I came across this question today at mba.com and even if I understood the logic behind I do not know how to list this CR

Try it. Thanks




Hi carcass
Can you please explain how D is better than E,
Because if all the property values have dropped then also government is not likely to do the assessment.
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Re: Property taxes are typically set at a flat rate per $1,000 of official [#permalink]

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New post 06 Oct 2015, 20:19
dav90 wrote:
carcass wrote:
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?


Property values have risen sharply and uniformly.

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

Property values have for the most part risen sharply; yet some have dropped slightly.

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

Property values have dropped significantly and uniformly.

I came across this question today at mba.com and even if I understood the logic behind I do not know how to list this CR

Try it. Thanks




Hi carcass
Can you please explain how D is better than E,
Because if all the property values have dropped then also government is not likely to do the assessment.


Karishma from Veritas actually explained it earlier. You should read the post entries before asking the same question. She explained in detail the meaning of "property values change at differential rates"

In summary, reassessments SHOULD occur WHEN property values change at DIFFERENT rates = some decrease by a lot while others decrease/increase by a little = NOT uniform

The problem with E is that the prices dropped uniformly. That's not "differential rates" and therefore reassessment is NOT needed, which does not fulfil the question stem which asks for a scenario in which a reassessment is needed.

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Re: Property taxes are typically set at a flat rate per $1,000 of official [#permalink]

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New post 23 Jan 2016, 10:34
carcass wrote:
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?


Property values have risen sharply and uniformly.

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

Property values have for the most part risen sharply; yet some have dropped slightly.

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

Property values have dropped significantly and uniformly.

I came across this question today at mba.com and even if I understood the logic behind I do not know how to list this CR

Try it. Thanks


Kind of tricky. But good question.

ABC are out because the question states it is unlikely to do so - that means total tax revenues would go down. That is the majority of the tax is down.

E does not satisfy that it 'reassessment should occur' because it has not risen at all.

D is the correct answer.

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Re: Property taxes are typically set at a flat rate per $1,000 of official [#permalink]

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New post 16 Mar 2016, 18:56
Bunuel wrote:

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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.


wow..to be honest..I would have not understood the argument if I were not involved in a property purchase for the company I work at the moment and learned what the reassessments mean...
so...if the price go up or go down at different rates - then reassessment.
if the prices go up at different rates - then most likely the property will be reassessed.
if the prices go down at different rates - reassessment needs to be done, but the government will hesitate to do so...since it wants more $$ as tax payments...

A. values have risen sharply and uniformly - it is more likely that the properties would be reassessed ... so no.
B. all values have risen - sharply and not so - definitely reassessments would come very soon.
C. properties have risen sharply, yet some dropped slightly - MOST PART so >50+ % have risen - definitely will be reassessed.
D. most values have dropped, but some rose. so 50+% dropped, and some 1-49% rose. since it is an overall drop, the government would not want to reassess the properties.. so looks good.
E. a good contender...but D is more strong.

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Re: Property taxes are typically set at a flat rate per $1,000 of official [#permalink]

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New post 30 Oct 2016, 02:35
mikeCoolBoy wrote:
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



Clear Explanation , Thanks.
But I have a doubt, If the property rates have dropped significantly and risen scarcely(option D) , the total revenue and tax for govt is low. so government is likely to have reassessment no? If the property rates have risen considerably and dropped scarcely (option C) then Government is getting a lot in Taxes and thus increased revenue but a reassessment is necessary , however it is unlikely to happen.
Please Correct me.

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Re: Property taxes are typically set at a flat rate per $1,000 of official [#permalink]

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New post 11 Nov 2017, 22:22
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. - Incorrect - we are talking about distortions that arise when property values change at differential rates

(B) Property values have all risen—some very sharply, some less so. - - Incorrect - we are talking about distortions that arise when property values change at differential rates

(C) Property values have for the most part risen sharply yet some have dropped slightly. - Incorrect - reassessment is likely since it will lead to increased revenue for government

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

(E) Property values have dropped significantly and uniformly. - Incorrect - we are talking about distortions that arise when property values change at differential rates

Answer D
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Re: Property taxes are typically set at a flat rate per $1,000 of official   [#permalink] 11 Nov 2017, 22:22

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