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# With Proposition 13, if you bought a house 11 years ago for

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Director
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With Proposition 13, if you bought a house 11 years ago for [#permalink]

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31 Jul 2004, 11:37
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With Proposition 13, if you bought a house 11 years ago for 75,000, your property tax would be approximately $914 a year (1 percent of 75,000 increased by 2 percent each year for 11 years); and if your neighbour bought an identical house next door to you for$200,000 this year, his tax would be $2,000 (1 percent of$200,000). Without Proposition 13, both you and your neighbour would pay $6000 a year in property taxes 13 percent of$200,000)

Which of the following is the conclusion for which the author most likely is arguing in the passage above?

A) Proposition 13 is unconstitutional because it imposes an unequal tax on properties of equal value.

B) If Proposition 13 is repealed, every home owner is likely to experience a substaintial increase in property taxes.

C) By preventing inflation from driving up property values, Proposition 13 has saved homeowners thousands of dollars in property taxes.

D) If proposition 13 is not repealed, identical properties will continue to be taxed at different rates.

E) Proposition 13 has benifitted some homeowners more than others.

Questions:

I dont understand how the OA is correct. I will post the OA after some discussion.
Director
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31 Jul 2004, 13:13
B would be my choice.

A - extreme - 'proposition 13 is unconstitutional' -
C - Out of Scope
D - the properties are not taxed differently - au contraire
E - SOme are benefitted and not others - such conclusion cant be drawn. No such evidence provided.
Director
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31 Jul 2004, 16:48
I thought answer choice "B" was wrong because it was too extreme. The verbiage "every home owner" [meaning its applicable to every home owner] is too strong. We just know about the house that "you" bought and compares that price to your neighbor.

I went with "E" because "Proposition 13" helps (a.k.a benifits) "you" more than "your neighbor" because you saved about [6000-914] whereas your neighbor would have saved about [6000-2000].

Therefore Proposal 13 benifits "you" more than "your neighbor".

What do you think? What is wrong with my line of reasoning.
Director
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31 Jul 2004, 20:35
Gmatguy,
To clarify on yur points..
1. B is not extreme. Proposition 13 - which is related to Property taxes is applicable to 'every' homeowner. Nothing extreme about it.

2. Propostion 13 is not discriminative - that one benefits more than the other - insuch case it would unconstitutional (as mentioned in A). Also as stated earlier there is no such evidence provided.

The author emphasises that 'Without Proposition 13, both you and your neighbour would pay $6000 a year in property taxes 13 percent of$200,000)'.

This should be read as ''Without Proposition 13, both you and your neighbour would pay property taxes of nearly 13 percent of your home as compared to 1%)'. Then B would be a easy choice.
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01 Aug 2004, 06:08
Without the last sentence of the argument, then E would have been the answer. The problem here is that although E is true, it is not what the author wants to conclude. As you can see, the last sentence means that without proposition13, everyone would have paid much more taxes.
_________________

Best Regards,

Paul

Director
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01 Aug 2004, 16:59
The OA is "B". I thought answer choice "B" was the "classic trap answer" because we just know about the taxes paid on 2 houses based on his arguement. So i thought he was taking the "sampling analogy" way too far.

While building his case the guy just discusses about the tax paid "with" and "without" Proposition 13 as applied to 2 separate houses during separate periods of time. So i still dont understand how he wants to apply his argument to every house owner. For example there could have been a house owner who paid 8000 with Proposition 13 in place and after repealing Proposition 13, he paid a standard tax fee of 2000.
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03 Aug 2004, 11:30
I don't think B is a trap. The author says that with Prop-13 you pay 914 and your neighbours pays 2000. Without Prop-13 you and you neighnour pay 6000. I think you can conclude, seemlessly, that if the Prop-13 is not in effect the taxes will go up.

You cannot say that one person is benefited more with Prop-13. Its true that dollar wise they may have benefitted, but we are talking about 2 different houses at purchased at two different point in time and different amount to taxes paid. There is no convincing argument on the basis of which we can coclude that author wants to say what E says.
03 Aug 2004, 11:30
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