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Ten years ago, the total share of federal, state, and local taxes

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Ten years ago, the total share of federal, state, and local taxes  [#permalink]

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New post 12 May 2017, 00:01
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Question Stats:

60% (01:22) correct 40% (01:41) wrong based on 236 sessions

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Ten years ago, the total share of federal, state, and local taxes was 23 percent of the nation’s Gross National Product. Now, that share has decreased to 21 percent.

Which one of the following can be properly inferred from the facts given above?

(A) The total amount of federal, state, and local taxes paid now is less than the amount paid ten years ago.
(B) On average, people now have a better standard of living than they did ten years ago.
(C) The average taxpayer keeps a greater percentage of income for his own use than he did ten years ago.
(D) Federal, state, and local governments have reduced the level of services they offer to constituents.
(E) Inefficiency and fraud have been reduced in government services.

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Re: Ten years ago, the total share of federal, state, and local taxes  [#permalink]

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New post 12 May 2017, 01:22
rohan2345 wrote:
Ten years ago, the total share of federal, state, and local taxes was 23 percent of the nation’s Gross National Product. Now, that share has decreased to 21 percent.

Which one of the following can be properly inferred from the facts given above?

(A) The total amount of federal, state, and local taxes paid now is less than the amount paid ten years ago.
(B) On average, people now have a better standard of living than they did ten years ago.
(C) The average taxpayer keeps a greater percentage of income for his own use than he did ten years ago.
(D) Federal, state, and local governments have reduced the level of services they offer to constituents.
(E) Inefficiency and fraud have been reduced in government services.


How can we really infer C
earlier it was 23% now it is 21%
it could mean that the total share of F, S and local taxes decreased with respect to GDP it could also mean that F S and Local taxes remained constant but GDP increased .
C and A seems similar, if the average tax payer keeps a greater percentage of his income then it means that he is paying less tax now than he paid 10 years ago.
So taxes in effect decreased.

Am I missing something, percentage questions tend to be tricky.
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Re: Ten years ago, the total share of federal, state, and local taxes  [#permalink]

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New post 12 May 2017, 02:17
(A) The total amount of federal, state, and local taxes paid now is less than the amount paid ten years ago. Incorrect ( May be GNP increased so much in 10 years that today's gnp's 21% is greater than that of 10 year before gnp's 23%)

(B) On average, people now have a better standard of living than they did ten years ago. It can be right

(C) The average taxpayer keeps a greater percentage of income for his own use than he did ten years ago. Correct

(D) Federal, state, and local governments have reduced the level of services they offer to constituents. Incorrect

(E) Inefficiency and fraud have been reduced in government services. Out of Scope

Between B and C, C seems to be more appropriate. :)

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Re: Ten years ago, the total share of federal, state, and local taxes  [#permalink]

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New post 12 May 2017, 09:05
Although i got it right , but please post official explanation.
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Re: Ten years ago, the total share of federal, state, and local taxes  [#permalink]

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New post 12 May 2017, 10:48
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arvind910619 wrote:
Although i got it right , but please post official explanation.


Hi Arvind,

Sure. Here is the official Explanation

If the various levels of government collect a smaller share of the GNP through taxes, then the average taxpayer keeps a larger share. The answer is (C). Be careful of choice (A): it commits an error by failing to distinguish between percentage and amount. While the percentage share of taxes has decreased, the overall amount of tax revenue could have increased if the GNP is larger than it was ten years ago. The other choices can not be logically inferred from the passage. Each choice offers a possible cause or effect of the tax reduction, but none of these must occur.

Hope this helps. All the best.
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Ten years ago, the total share of federal, state, and local taxes  [#permalink]

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New post 17 May 2017, 01:46
This question can convincingly be solving using POE. Option C doesn't jump out to me as correct answer choice. Option C states that Tax payers are paying lesser percentage from their income. But the issue is, it could be possible that an average tax payer's income has increased, and now even a smaller percentage equates to the same percentage contribution as before. Hence there isn't any change in the total money contributed via taxes. But still the total %tage contribution to GNP is lower. This could be because other parts contributing to 100% GNP might have grown in percentage, there by increasing the total $$ of GNP of which taxes, since the same as before, now forms a smaller percentage. It's a "could be" scenario hence option C is not 100% convincing.

i hope it makes sense. Let me know, if I am wrong somewhere?
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Re: Ten years ago, the total share of federal, state, and local taxes  [#permalink]

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New post 17 May 2017, 21:39
rohan2345 wrote:
Ten years ago, the total share of federal, state, and local taxes was 23 percent of the nation’s Gross National Product. Now, that share has decreased to 21 percent.

Which one of the following can be properly inferred from the facts given above?

(A) The total amount of federal, state, and local taxes paid now is less than the amount paid ten years ago.
(B) On average, people now have a better standard of living than they did ten years ago.
(C) The average taxpayer keeps a greater percentage of income for his own use than he did ten years ago.
(D) Federal, state, and local governments have reduced the level of services they offer to constituents.
(E) Inefficiency and fraud have been reduced in government services.


By POE we can get to C ...
While solving infer question based on percentage.I always try to avoid answer choices reflecting numbers (such as here we can see "total amount" in answer choice A).Correct answer choice in these type of question almost always deal in fraction , ratio or percentage .
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Re: Ten years ago, the total share of federal, state, and local taxes  [#permalink]

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New post 22 Aug 2018, 01:43
stne wrote:
rohan2345 wrote:
Ten years ago, the total share of federal, state, and local taxes was 23 percent of the nation’s Gross National Product. Now, that share has decreased to 21 percent.

Which one of the following can be properly inferred from the facts given above?

(A) The total amount of federal, state, and local taxes paid now is less than the amount paid ten years ago.
(B) On average, people now have a better standard of living than they did ten years ago.
(C) The average taxpayer keeps a greater percentage of income for his own use than he did ten years ago.
(D) Federal, state, and local governments have reduced the level of services they offer to constituents.
(E) Inefficiency and fraud have been reduced in government services.


How can we really infer C
earlier it was 23% now it is 21%
it could mean that the total share of F, S and local taxes decreased with respect to GDP it could also mean that F S and Local taxes remained constant but GDP increased .
C and A seems similar, if the average tax payer keeps a greater percentage of his income then it means that he is paying less tax now than he paid 10 years ago.
So taxes in effect decreased.

Am I missing something, percentage questions tend to be tricky.


Hello stne,

Let me put my cents here. Suppose GDP increased. Tax contribution might have increased proportionately as the argument has not disclosed any Tax variation in the mentioned period.
Another thing might have happened. People might have shown a greater percentage of their income as various investments and paid less tax.
I am an Engineer working in an Indian Manufacturing Company. I pay my tax considering my income slabs, accepted exemption and total amount of investment. As per this argument, first 2 elements remain same. So, my tax proportion may vary considering the proportion of my investment.
If I am investing more, I am paying less tax.
Considering my real life scenario I went for option C.

Hope, it helps.
Not an expert. We can argue.
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Re: Ten years ago, the total share of federal, state, and local taxes &nbs [#permalink] 22 Aug 2018, 01:43
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