Question #1132

Why not D?

Started by Marissa-Avnaim · started 2019-06-23 19:54 · last activity 2020-01-06 20:18 · 2 replies

I still don't understand why B is the correct answer - I choose D but was stuck between the two. I thought B was irrelevant - as we know nothing about the price of rent. I decided on D because it mentioned the middle class as well. Can someone please explain?

Replies

  1. MrLaw · 2019-11-03 01:13

    B shows us that the tax reform actually hurts the middle class. If they are saving $100/year in taxes, but paying an extra $40/month in rental costs, then their yearly rental fees are an extra $480. The $100-$300 means nothing.

  2. shunhe · 2020-01-06 20:18

    Hi all, Yup, @Alexander-Blankers hit the nail on the head. The additional amount in rental costs low income families will have to pay is less than the money they get from the tax reforms, and so they end up losing money because of the tax reforms.

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