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

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Manager
Joined: 16 Mar 2008
Posts: 67

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

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21 Jun 2008, 11:30
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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B) If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.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D) If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates.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.

Discuss...

Kudos [?]: 7 [0], given: 0

CEO
Joined: 17 Nov 2007
Posts: 3585

Kudos [?]: 4483 [0], given: 360

Concentration: Entrepreneurship, Other
Schools: Chicago (Booth) - Class of 2011
GMAT 1: 750 Q50 V40
Re: GMAT CR : property prices [#permalink]

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21 Jun 2008, 11:35
look here some nice discussion:http://gmatclub.com/forum/11-t58802
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Kudos [?]: 4483 [0], given: 360

Director
Joined: 01 Jan 2008
Posts: 505

Kudos [?]: 54 [0], given: 0

Re: GMAT CR : property prices [#permalink]

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21 Jun 2008, 12:30
Its B . The other arguments compare and talk about benefits and different rates of taxation for diff properties.

The imp thing here is that without Prop 13 :- all tenants would pay 3% tax instead of 1% and that too on the current market value of their appt . Hence B is the best .

In questions like these go for the most inclusive answer. Although D is good, B is more inclusive. Hence better.

Kudos [?]: 54 [0], given: 0

Manager
Joined: 16 Mar 2008
Posts: 67

Kudos [?]: 7 [0], given: 0

Re: GMAT CR : property prices [#permalink]

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21 Jun 2008, 23:24
thanks bhatia and walker.....

but can we expect these typs or CR's to come in GMAT ...?

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Re: GMAT CR : property prices   [#permalink] 21 Jun 2008, 23:24
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