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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21 Sep 2005, 09:40
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17. 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(B) If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.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(D) If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates.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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21 Sep 2005, 12:29
D...the statement states that the houses are identical, therefore the sole reason the buyer is paying higher taxes is because he/she bought the house 11 years later. Its seems to me that a logical conclusion is that because of prop. 13 people pay different taxes for identical properties.
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21 Sep 2005, 14:24
I will go with safest of all.

E is my choice.
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21 Sep 2005, 15:18
IMO, B. It's most supported by the passage.

A is out of scope. We're not talking about the constitutionality of Prop. 13

C is just wrong. No where is it stated that Prop 13 prevents inflationary effects on property values.

D is wrong because an identical HOUSE is not an identical PROPERTY

E can't be properly inferred from the passage. Prop 13 is the same for everyone. Rising home prices has been good for homeowners, not Prop 13.
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21 Sep 2005, 15:22
(E) would be my choice too.
Its quite clear from the stem.
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21 Sep 2005, 15:52
I pick (B).

If my math is correct, the tax rate is identical to every home owners.

* Proposition 13 = tax rate is 1 percent of the purchasing cost increased by 2 percent each yaer.

If you bought a house for $75,000 11 years ago, the SUM of the tax you've paid is$914. (1% of the cost increased by 2% for 11 years)

If you bought a house for $200,000 this year, the SUM of the tax you've paid is$2,000. (1% of the cost increased by 2% for 0 year)

However, without Proposition 13, you have to pay \$6,000 (3%).

Therefore, if it had not been for Proposition 13, you have to pay more.

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

>> The amount tax is unequal, but the tax rate is equal. Thus, very consitutional.

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

>> Without Proposition 13, you have to pay more. Thus, increase in property taxes will follow.

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

>> Not relevant.

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

>> The tax rate is the same for everybody. The tax amount is different according to the year of purchase and the cost of the house.

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

>> Proposition 13 has one identical tax rate, and it thus does not discriminate people.
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22 Sep 2005, 01:50
Good job guys. OA is B.
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22 Sep 2005, 01:50
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