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The tax system of the Republic of Grootland encourages borrowing by gr

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The tax system of the Republic of Grootland encourages borrowing by gr  [#permalink]

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New post Updated on: 29 May 2019, 11:13
2
25
00:00
A
B
C
D
E

Difficulty:

  75% (hard)

Question Stats:

62% (02:32) correct 38% (02:42) wrong based on 612 sessions

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Which of the following, if true, is the most logical completion of the argument below?

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 __________.


(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 taxpayers from banks trying to encourage people to open savings accounts

(E) taxes due in Grootland on the amount that a taxpayer has invested in interest-bearing savings accounts

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Originally posted by Paul on 26 Mar 2004, 14:31.
Last edited by Bunuel on 29 May 2019, 11:13, edited 3 times in total.
Edited the question.
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Re: The tax system of the Republic of Grootland encourages borrowing by gr  [#permalink]

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New post 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.
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Re: The tax system of the Republic of Grootland encourages borrowing by gr  [#permalink]

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New post 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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Re: The tax system of the Republic of Grootland encourages borrowing by gr  [#permalink]

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New post 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
D) disadvantage savings
E) disadvantage savings

only A favors savings and is thus the answer.
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Re: The tax system of the Republic of Grootland encourages borrowing by gr  [#permalink]

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New post 05 Sep 2008, 22:03
spriya wrote:
Which of the following, if true, is the most logical completion of the argument below?

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______

(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 taxpayers from banks trying to encourage people to open savings accounts
(E) taxes due in Grootland on the amount that a taxpayer has invested in interest-bearing savings accounts

kindly let me know about the line of reasoning here


A. If Grootland’s tax system consistently favor borrowing over saving, there would be either tax relief for borrowing or tax due on savings. However its not the case. Since it offers tax relief for taxpayer’s income that are set aside to increase that taxpayer’s total savings.


So A is correct.
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Re: The tax system of the Republic of Grootland encourages borrowing by gr  [#permalink]

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New post 10 Oct 2018, 08:56
Paul wrote:
Which of the following, if true, is the most logical completion of the argument below?

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 __________.

(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 taxpayers from banks trying to encourage people to open savings accounts

(E) taxes due in Grootland on the amount that a taxpayer has invested in interest-bearing savings accounts


Hi DavidTutorexamPAL VeritasKarishma

Please help in untangling the stimulus.

Thanks!
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Re: The tax system of the Republic of Grootland encourages borrowing by gr  [#permalink]

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New post 29 Oct 2018, 00:47
1
Paul wrote:
Which of the following, if true, is the most logical completion of the argument below?

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 __________.

(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 taxpayers from banks trying to encourage people to open savings accounts

(E) taxes due in Grootland on the amount that a taxpayer has invested in interest-bearing savings accounts


Argument:
The system taxes the saving, and provides tax relief on borrowing.
However, this policy is not consistently followed because else it wouldn't ...

Now we need to find an option that is opposite to the policy. We need to look for an option which shows:
- either tax the borrowing
- or tax relief to the saving

(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

This provides tax relief to increased saving. This is our answer.

(B) tax relief in Grootland for the processing fees that taxpayers pay to lending institutions when obtaining certain kinds of loans

This provides tax relief in fees for borrowing. Doesn't work.

(C) tax relief in Grootland for interest that taxpayers are charged on the unpaid balance in credit card accounts

This provides tax relief for interest on unpaid CC balance (borrowing). Doesn't work.

(D) taxes due in Grootland on the cash value of gifts received by taxpayers from banks trying to encourage people to open savings accounts

This taxes gifts received on trying to save. Doesn't work.

(E) taxes due in Grootland on the amount that a taxpayer has invested in interest-bearing savings accounts

This taxes amount invested in savings account. Doesn't work.

Answer (A)
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Re: The tax system of the Republic of Grootland encourages borrowing by gr  [#permalink]

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New post 02 May 2019, 21:27
Hi Guys,

Isn't option A.) already negated in the argument. I am confused since it occurred to me that this option is the exact opposite of -"The system also discourages saving by taxing any interest earned on savings"
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Re: The tax system of the Republic of Grootland encourages borrowing by gr  [#permalink]

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New post 13 Aug 2019, 07:43
The Question stem and the answer choices are extremely wordy!!!! Phew!
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Re: The tax system of the Republic of Grootland encourages borrowing by gr   [#permalink] 13 Aug 2019, 07:43
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