In McCulloch v. Maryland,1Chief Justice Marshall declared that the power to tax involves the power to destroy. This maxim only means that the power…

The question

In McCulloch v. Maryland,1Chief Justice Marshall declared that the power to tax involves the power to destroy. This maxim only means that the power to tax includes the power to regulate even to the extent of prohibition or destruction of businesses. The reason is that the legislature has the inherent power to determine who to tax, what to tax and how much tax is to be imposed. Pursuant to the regulatory purpose of taxation, the legislature may impose tax in order to discourage or prohibit things or enterprises inimical to the public welfare.2 In the given problem, the legislature’s imposition of prohibitive sin tax on cigarettes is congruent with its purpose of discouraging the public form smoking cigarettes which are hazardous to health. XYZ Corporation manufactures glass panels and is almost at the point of insolvency. It has no more cash and all it has are unsold glass panels. It received an assessment from the BIR for deficiency income taxes. It wants to pay but due to lack of cash, it seeks permission to pay in kind with glass panels. Should the BIR grant the requested permission? (2013 Bar Question)

1. A.It should grant permission to make payment convenient to taxpayers.
2. B.It should not grant permission because a tax is generally a pecuniary burden.
3. C.It should grant permission; otherwise, XYZ Corporation would not be able to pay.
4. D.It should not grant permission because the government does not have the storage facilities for glass panels.

This question has not been answered yet.