tax system

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tax system

by crazy4gmat » Tue Nov 11, 2008 10:36 am
Which of the following, if true, is the most logical completion of the argument below?
The tax system of the Republic of Grootland encourages borrowing by granting its taxpayers tax relief for interest paid on loans. The system also discourages saving by taxing any interest earned on savings. Nevertheless, it is clear that Grootland’s tax system does not consistently favor borrowing over saving, for if it did, there would be no______
(A) tax relief in Grootland for those portions of a taxpayer’s income, if any, that are set aside to increase that taxpayer’s total savings
(B) tax relief in Grootland for the processing fees that taxpayers pay to lending institutions when obtaining certain kinds of loans
(C) tax relief in Grootland for interest that taxpayers are charged on the unpaid balance in credit card accounts
(D) taxes due in Grootland on the cash value of gifts received by taxpayers from banks trying to encourage people to open savings accounts
(E) taxes due in Grootland on the amount that a taxpayer has invested in interest-bearing savings accounts
Source: — Critical Reasoning |

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by Jatinder » Tue Nov 11, 2008 11:01 am
Only A and D attacks at the right place
A is close SO IMO A

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by scoobydooby » Thu Nov 13, 2008 2:38 am
IMO: E

Conclusion: Grootland's tax system does not always prefer borrowing to savings=>it prefers savings at times.

If it consistently preferred borrowing to saving, then in effect there would be no saving. interest on saving is taxed, so if there was no saving- no taxes on interest on savings-this is what E says

B, C, D are easily out of scope

A: no tax relief to increase savings. tax relief is only mentioned in the context of interest on borrowing, not saving.

E: correct brings out what would have happened if there were no savings. correct

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by nervesofsteel » Thu Nov 13, 2008 11:03 am
Yes it should be A

as this option only says that there are tax reliefs on savings .. all other options says that tax reliefs are on borrowing

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Re: tax system

by Stockmoose16 » Thu Nov 13, 2008 12:03 pm
crazy4gmat wrote:Which of the following, if true, is the most logical completion of the argument below?
The tax system of the Republic of Grootland encourages borrowing by granting its taxpayers tax relief for interest paid on loans. The system also discourages saving by taxing any interest earned on savings. Nevertheless, it is clear that Grootland’s tax system does not consistently favor borrowing over saving, for if it did, there would be no______
(A) tax relief in Grootland for those portions of a taxpayer’s income, if any, that are set aside to increase that taxpayer’s total savings
(B) tax relief in Grootland for the processing fees that taxpayers pay to lending institutions when obtaining certain kinds of loans
(C) tax relief in Grootland for interest that taxpayers are charged on the unpaid balance in credit card accounts
(D) taxes due in Grootland on the cash value of gifts received by taxpayers from banks trying to encourage people to open savings accounts
(E) taxes due in Grootland on the amount that a taxpayer has invested in interest-bearing savings accounts
Only A makes sense here. The conclusions states, "Grootland's tax system does not consistently favor borrowing over saving, for if it did, there would be no..."

You are looking for a statement that shows Grootland offers tax relief to people who save money (rather than to just borrowers). A says that people who SAVE a portion of their income get tax relief.

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by peter.p.81 » Wed May 11, 2016 3:05 am
I'm pretty confident that A is correct answer.