Critical Reasoning

Can someone suggest answer to this question with explanation?
1000CR- GMAT - Test A - Ques 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(B) If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.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(D) If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates.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.

Thanks in advance,

ok
what do we have here?

* with p13. if we bought a home some years earlier; our p.tax would be $914
[note that: its the average of all sum of tax paid in certain (11) years ]
& if our neighbour buys same home @ some higher price now;
he would be taxed higher ie $ 2000

Trap: since this is not a quant section ; do not try to calculate the the taxed figure;
also line :"... tax would be approximately $914 a year..."
suggests us that the 914 is an average of what we had to pay.

& last point
* without p13: we and our neighbour would have to pay much higher price for our property.

its as simple as that if we do not get trapped in numbers
key: forget the 'percent', 'no. of years', 'ave.' its all the trap. Comparing is the key.

Conclusion: without p13 we hv to pay higher.

i hope, now u d get the answer.

To me choices B, D and E all look convincing!

B says - If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.
True and it can be concluded from last line (Without Proposition 13, both you and your neighbor would pay $6,000 a year in property taxes (3 percent of $200,000).)

D says - If Proposition 13 is not repealed, identical properties will continue to be taxed at different rates.
Again true since the tax depends on the year of purchase.

E says - Proposition 13 has benefited some homeowners more than others.
Again true and can be concluded since without P13 everyone will have to pay more tax, but some people benefited more by P13.

I chose E when I attempted this test. However, the answer mentioned in 1000CR document is B. I would be glad to recieve some help ...

i just put my points on the paragraph given.

sorry that i didnt explain it with respect to answer-options available.

First of all please note that
Just like our neighbour, we would pay just 1% of the total worth (ie $750)in the first year of our property purchase.
& Just like our neighbour, today, our tax would been increased to $2000
(since 2% been added every year).
so today we & our neighbour pays almost same ammount of Tax for almost same property.

this explanaition cancels out options A, D & E.

i may post one more post on the explanation if you need.

Thanks a lot ... I got it now! Though the overall tax paid are different the tax rates are same. I was missing this point.

This is indeed an important point .. i too missed out on the rate ..and chose the wrong answer .. thnx a lot ..it was a "to the point" explanation ..
__fRoZeN__

glad to be of some help.

but forum continues...

we can use this topic for CR queries.

Even i have many queries so i am also going to ask people for help.

aim-wsc is always helpful

aim-wsc.....just one question

how did we arrive at a current tax value of $2000 for the old property.

What are we increasing with 2% every year?

Some where along on this forum i found that a great post had been created by aim-wsc, for 1000 cr explaination. But this post is too old...can you ppl help me out with the latest link for the solution, I would like to be a member in your discussions!!

Regards
Swapnil

swap wrote:Some where along on this forum i found that a great post had been created by aim-wsc, for 1000 cr explaination. But this post is too old...can you ppl help me out with the latest link for the solution, I would like to be a member in your discussions!!

Regards
Swapnil

I haven't updated that thread since long... I just checked that you've updated it with few links.
My priorities changed and thus I couldn't devote my time to these threads (1000 SC & 1000 CR) but the door isn't closed completely I may update it sometime...

Thanks for your inputs Swapnil.

Link for the thread will be a great help.

BTW the copy of the 1000CR I have says the answer is D

I would have gone with E also since thats the one we can be sure about. Rest all are may be or may not be cases.

netigen wrote:Link for the thread will be a great help.

Here's the link you're talking aboout.
https://www.beatthegmat.com/answers-and- ... t1893.html

aim-wsc, i don't get that how can we cancel E.

if I am paying less tax then my neighbor then doesn't it prove that some people are benefiting more from PP 13 than others. Hence, E seems logical.

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

How can we say any law would be unconstitutional if it has unequal taxes?

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

What suggests that if p13 is repealed, no other law won't come into picture. Nothing is said about the picture when p13 is not present.


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

from where inflation comes?


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

Identical to B. Thr may be some other laws also which are not explained.

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

correct.





as far as explanation to aim-wsc, I think first of all, approx not necessarily means average, but rather it means 914.something calculated on behalf of $(75000*1%) for the first year and that $750 increase by 2 percent every year.