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A
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Difficulty:
55%
(hard)
Question Stats:
66% (02:27) correct
34%
(02:36)
wrong
based on 3354
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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
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
29 Oct 2018, 00:47
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Paul
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)
General Discussion
05 Sep 2008, 22:03
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spriya
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.
