Taxation, 2013 Bar — Question MC-IV

MULTIPLE CHOICE

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 _____ (1%) (A) wrong because taxes are the lifeblood of the government (B) wrong because the law recognizes that the power to tax is the power to destroy (McCulloch v. Maryland, 17 U.S. 4 Wheat. 316., 1819). (C) correct because no government can deprive a person of his livelihood (D) correct because Congress, in this case, exceeded its power to tax

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