GMAT Verbal Reasoning Practice Test 2

With Proposition 13 , if you bought your house 11 years ago for $\mathrm{\$}75,000$, your property tax would be approximately $\mathrm{\$}914$ a year ( 1 percent of $\mathrm{\$}75,000$ increased by 2 percent each year for 11 years); and if your neighbor bought an identical house next door to you for $\mathrm{\$}200,000$ this year, his tax would be $\mathrm{\$}2,000$ ( 1 percent of $\mathrm{\$}200,000$ ). Without Proposition 13 , both you and your neighbor would pay $\mathrm{\$}6,000$ a year in property taxes ( 3 percent of $\mathrm{\$}200,000).$