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# The tax system of the Republic of Grootland encourages

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GMAT Club Legend
Joined: 15 Dec 2003
Posts: 4288
The tax system of the Republic of Grootland encourages [#permalink]

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26 Mar 2004, 14:31
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Difficulty:

(N/A)

Question Stats:

67% (02:07) correct 33% (01:35) wrong based on 8 sessions

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The tax system of the Republic of Grootland encourages borrowing by granting its taxpayers tax relief for interest paid on loans. The system also discourages saving by taxing any interest earned on savings. Nevertheless, it is clear that Grootland's tax system does not consistently favor borrowing over saving, for if it did, there would be no _____________.

Question:
Which of the following, if true, is the most logical completion of the argument above?

A. tax relief in Grootland for those portions of a taxpayer's income, if any, that are set aside to increase that taxpayer's total savings.
B. tax relief in Grootland for the processing fees that taxpayers pay to lending institutions when obtaining certain kinds of loans.
C. tax relief in Grootland for interest that taxpayers are charged on the unpaid balance in credit card accounts.
D. taxes due in Grootland on the cash value of gifts received by taxpayer from banks trying to encourage people to open savings accounts.
E. taxes due in Grootland on the amoutn that a taxpayer has invested in interest-bearing savings accounts.
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Paul

Manager
Joined: 27 Feb 2004
Posts: 185
Location: illinois

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26 Mar 2004, 14:34
It was between A and E and I choose A over E
Director
Joined: 03 Jul 2003
Posts: 652

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26 Mar 2004, 14:48
Another good question!

Senior Manager
Joined: 05 Feb 2004
Posts: 290
Location: USA

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26 Mar 2004, 14:49
A for me too.............E is just the opposite..........
SVP
Joined: 30 Oct 2003
Posts: 1790
Location: NewJersey USA

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26 Mar 2004, 16:15
I will choose A.
A says the tax system is encouraging savings by giving tx relief on the money that is set aside for savings.
Senior Manager
Joined: 05 May 2003
Posts: 424
Location: Aus

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26 Mar 2004, 21:08
I will go with A.
But it took me more than 2 mins.
Manager
Joined: 15 Mar 2004
Posts: 155
Location: New York

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26 Mar 2004, 21:28
A here as well. This CR is really wordy and with the question posed the way it is makes it difficult to understand exactly whats happening. Good CR though, made me scratch my head.
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GMAT Club Legend
Joined: 15 Dec 2003
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26 Mar 2004, 22:00
double negative questions are always tougher. OA is indeed A. we have to eliminate answers which either favor borrowing or disadvantage savings.
B) favors borrowing
C) favors borrowing

only A favors savings and is thus the answer.
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Paul

Intern
Joined: 22 Aug 2015
Posts: 10
Re: The tax system of the Republic of Grootland encourages [#permalink]

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14 Apr 2016, 06:28
I also go with A, i think it is the right answer.
Re: The tax system of the Republic of Grootland encourages   [#permalink] 14 Apr 2016, 06:28
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