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With Proposition 13, if you bought your house 11 years ago

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Manager
Joined: 09 Jun 2005
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With Proposition 13, if you bought your house 11 years ago [#permalink]

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27 Jun 2005, 03:20
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With Proposition 13, if you bought your 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 neighbor 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 neighbor would pay \$6,000 a year in property taxes (3 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(B) If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.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(D) If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates.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 benefited some homeowners more than others.

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Manager
Joined: 28 Jan 2004
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27 Jun 2005, 05:38
B for me.
_________________

It's not over until it's OVER!

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Director
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27 Jun 2005, 10:34
B for me too.

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

- we are talking about tax rates, not unequal tax..

(B) If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.

- true

(C) By preventing inflation from driving up property values, Proposition 13 has saved homeowners thousands of dollars in property taxes.
- out of scope
(D) If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates.
- No, tax rate is same. 1%

(E) Proposition 13 has benefited some homeowners more than others.
- has benifitted all

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Manager
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27 Jun 2005, 21:54
I am confused between B and E.

B says all homeowners would get benefitted.

E says that some homeowners would be benefitted more than others. thats also true

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Intern
Joined: 22 Jun 2005
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28 Jun 2005, 01:44
i'll go for B too!

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Director
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28 Jun 2005, 16:59
E.

the reason it's not B imo is that 'every' in B is worse than 'some' in E. We cannot generalize from a single example of two people owning identical houses.

Last edited by sparky on 28 Jun 2005, 17:02, edited 1 time in total.

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Senior Manager
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28 Jun 2005, 17:02
I am confused between B and E.

B says all homeowners would get benefitted.

E says that some homeowners would be benefitted more than others. thats also true

I said E first and would have gotten it wrong.

B is more plausible to me.

I'd have guessed this.

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Manager
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28 Jun 2005, 21:09
OA is B

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Senior Manager
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01 Jul 2005, 19:50
OA is B

I think that the answer is D (knowing the OA).

Because Prop13 is detrimental in the long run , i.e paying 5% from the 22nd year onwards and increasing thereafter.So having prop13 is defintely beneficial although ppl end up paying more taxes than they otherwise would for the first 11 years.

I think the authour by mentioning two properties worth the same but paying diff taxes , alludes to the dispartiy.
"WHY" does he have to give the second example,which serves no purpose other than to empahsise this disparity.

HMTG.

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01 Jul 2005, 19:50
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