With Proposition 13, if you bought your house 11 years ago : GMAT Critical Reasoning (CR)
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# With Proposition 13, if you bought your house 11 years ago

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With Proposition 13, if you bought your house 11 years ago [#permalink]

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02 Sep 2005, 05:42
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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(B) If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.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(D) If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates.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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02 Sep 2005, 06:05
e?
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02 Sep 2005, 08:01
it has to be B;
with prop 13 1% tax versus without prop 13 3% tax
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02 Sep 2005, 08:08
I wud choose B over E.

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02 Sep 2005, 11:52
E

From the argument it is clear that the values of both the houses are the same, (because it says, without Prop 13, the tax on both house will be same), but due to the proposition 13 they pay different tax, 914 against 2000.

Everything except B, D and E can be rejected, But I believe B is far fetched because for 200,000 range the tax is 3% without prop 13, but who is to say about lower and higher value houses, will their tax increase too without proposition?
Same argument for D, are identical houses of higher or lower value paying different taxes due to prop 13? we dont know..

So the safest answer IMO E, because we known that currently there are some owner with equal value of houses paying less taxes.
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02 Sep 2005, 12:07
I think the answer is D.

Proposition 13 causes different taxes on identical properties. The amount of tax you pay on your house depends more on when the house was purchased, not the price you purchased it for. I think E summarizes the paragraph more than states the conclusion of the author.
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02 Sep 2005, 12:17
popew626 wrote:
I think the answer is D.

Proposition 13 causes different taxes on identical properties. The amount of tax you pay on your house depends more on when the house was purchased, not the price you purchased it for. I think E summarizes the paragraph more than states the conclusion of the author.

IMO D is far fetched, and E is the safest, let us wait for the OA. One can argue D summarizes the paragraph too....
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02 Sep 2005, 12:26
ranga41 wrote:
popew626 wrote:
I think the answer is D.

Proposition 13 causes different taxes on identical properties. The amount of tax you pay on your house depends more on when the house was purchased, not the price you purchased it for. I think E summarizes the paragraph more than states the conclusion of the author.

IMO D is far fetched, and E is the safest, let us wait for the OA. One can argue D summarizes the paragraph too....

Yeah, you're right. This is a tough one.
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02 Sep 2005, 14:51
E is the best one I feel as it doesn't go to any extremes.
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03 Sep 2005, 00:48
OA is B.
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03 Sep 2005, 04:18
ywilfred wrote:
OA is B.

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03 Sep 2005, 09:18
ranga41 wrote:
ywilfred wrote:
OA is B.

There's no OE on this one. But if you look at the argument, it states that without proposition 13, each owner might actually have to pay more, 3% of the hosue value compared to 1%.
03 Sep 2005, 09:18
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