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Altonville tax

Expert replies
by ssgmatter » Tue May 11, 2010 6:23 am
The total market value of real estate in Altonville has steadily declined over the past
four years. This decline has meant that the overall figure on which the city's property
tax is based-the assessed value of that real estate-has also declined. The percentage
of assessed value that was paid as property taxes to the city, however, did not change
from year to year during this period.
The information above most strongly supports which of the following?
A. The percentage of Altonville's yearly revenue that comes from money collected
in property taxes did not change over the past four years.
B. The percentage of Altonville's yearly revenue that comes from money collected
in property taxes has declined steadily over the past four years.
C. The amount of revenue that Altonville collected from property taxes was lower
last year than it was four years ago.
D. During the past four years, Altonville officials increased tax rates on other
sources of revenue such as retail sales and business profits.
E. Altonville will soon require property owners to pay a higher percentage of the
assessed value of their property as property tax.

Stuck between A B and C...any explanations?
Best-
Amit
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Source: — Critical Reasoning |

by ssgmatter » Tue May 11, 2010 6:31 am
Let me see if i can explain this one

A talks about the yearly revenue but no information is mentioned in the passage about the yearly revenue

B same as A

C if say suppose four years ago the value was 1000 but last year it was 500 becuase the assesed value has declined....However percentage of assesed value paid as property tax is same so let us assume this percentage as 20

so four years ago amount paid is 20/100*1000=200

Last year amount paid is 20/100*500=100

So I think it should be C with my logic

D out of scope as argument does not talk about the revenue from other sources

E out of scope as it talks about something that will happen in future and hence no relation to the argument

Please correct me in my logic

Cheers!
Best-
Amit
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by DanaJ » Tue May 11, 2010 6:52 am
Received a PM.

Your reasoning is correct.

A and B are out because when we say "percentage of assessed value" we are talking strictly about the value of real estate and not something else. Other taxes do not come into discussion.

C is correct because, if the percentage stays the same but the base to which you are applying the percentage gets smaller, than the resulting amount is smaller.
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by ssgmatter » Tue May 11, 2010 6:53 am
Thankyou Dana.

Cheers!
Best-
Amit
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