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Congress passed a sin tax law that increased the tax rates on cigarettes by 1,000%. The law was thought to be sufficient to drive many cigarette…

2013 Bar Exam · Taxation Law · Question 18 · Multiple choice

The question

Congress passed a sin tax law that increased the tax rates on cigarettes by 1,000%. The law was thought to be sufficient to drive many cigarette companies out of business, and was questioned in court by a cigarette company that would go out of business because it would not be able to pay the increased tax. The cigarette company is _____ (2013 Bar Question)

  1. A.wrong because taxes are the lifeblood of the government
  2. B.wrong because the law recognizes that the power to tax is the power to destroy
  3. C.correct because no government can deprive a person of his livelihood
  4. D.correct because Congress, in this case, exceeded its power to tax

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