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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  [#permalink]

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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.


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.

Originally posted by rohansherry on 22 Aug 2009, 07:37.
Last edited by Bunuel on 23 Jan 2019, 04:15, edited 6 times in total.
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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 Nov 2012, 00:19
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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


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
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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 22 Aug 2009, 08:36
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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
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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 22 Aug 2009, 08:47
2
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
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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 05 Nov 2012, 20:02
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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


"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!
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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 05 Nov 2012, 23:42
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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.

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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 22 Jan 2014, 10:09
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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

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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 28 Sep 2014, 23:55
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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.


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.
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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 05 Oct 2015, 22:47
VeritasPrepKarishma wrote:
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


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?
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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 05 Oct 2015, 23:51
SamuelWitwicky wrote:
VeritasPrepKarishma wrote:
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




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?


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

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New post 25 Feb 2019, 10:52
This question becomes very easy to solve once we notice that the entire argument hinges on one word specifically Differential Rates. This means that the reassessments should be frequent when property values change at DIFFERENT RATES. If we were to pre-think, we can safely say that the government will certainly not reassess if the property rates are going down at different rates because this will impact its current revenue and I am sure it wouldn't want to see a decrease in its revenue.

We can eliminate A and E because our argument tells us that the "reassessments should be frequent when property values change at DIFFERENT RATES". We can also eliminate option B and C. This gives the government an incentive to reassess because by doing so, it will see an increase in its current revenue. Only option D tells us where a reassess should occur but the government won't do so as it will decrease its current revenue.
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