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).

Question

Examsnet · Accepted Answer

Correct Answer is :  If Proposition 13 is repealed, every homeowner is likely to experience a substantial increase in property taxes.

GMAT Verbal Reasoning Practice Test 2