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    Lutz v. Araneta

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    tricia_merc
    The document summarizes a Supreme Court case regarding the constitutionality of taxes imposed under the Sugar Adjustment Act. The Act was passed due to threats to the sugar industry from potential export taxes and loss of preferential trade status. It imposed new taxes on sugar production and land used for sugar cane cultivation. The plaintiff argued the taxes served only to support the sugar industry, not a public purpose. However, the Court held that [1] the Act had a regulatory purpose of rehabilitating and stabilizing the threatened industry; [2] promoting the sugar industry promotes general welfare; and [3] the legislature has discretion to adjust industry benefits using its taxing power. The Court affirmed the lower court decision finding the taxes constitutional.

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    Lutz v. Araneta

    Uploaded by

    tricia_merc
    123 views2 pages
    The document summarizes a Supreme Court case regarding the constitutionality of taxes imposed under the Sugar Adjustment Act. The Act was passed due to threats to the sugar industry from potential export taxes and loss of preferential trade status. It imposed new taxes on sugar production and land used for sugar cane cultivation. The plaintiff argued the taxes served only to support the sugar industry, not a public purpose. However, the Court held that [1] the Act had a regulatory purpose of rehabilitating and stabilizing the threatened industry; [2] promoting the sugar industry promotes general welfare; and [3] the legislature has discretion to adjust industry benefits using its taxing power. The Court affirmed the lower court decision finding the taxes constitutional.

    Original Description:

    Case digest for Tax 1

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    The document summarizes a Supreme Court case regarding the constitutionality of taxes imposed under the Sugar Adjustment Act. The Act was passed due to threats to the sugar industry from potential export taxes and loss of preferential trade status. It imposed new taxes on sugar production and land used for sugar cane cultivation. The plaintiff argued the taxes served only to support the sugar industry, not a public purpose. However, the Court held that [1] the Act had a regulatory purpose of rehabilitating and stabilizing the threatened industry; [2] promoting the sugar industry promotes general welfare; and [3] the legislature has discretion to adjust industry benefits using its taxing power. The Court affirmed the lower court decision finding the taxes constitutional.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    123 views2 pages

    Lutz v. Araneta

    Uploaded by

    tricia_merc
    The document summarizes a Supreme Court case regarding the constitutionality of taxes imposed under the Sugar Adjustment Act. The Act was passed due to threats to the sugar industry from potential export taxes and loss of preferential trade status. It imposed new taxes on sugar production and land used for sugar cane cultivation. The plaintiff argued the taxes served only to support the sugar industry, not a public purpose. However, the Court held that [1] the Act had a regulatory purpose of rehabilitating and stabilizing the threatened industry; [2] promoting the sugar industry promotes general welfare; and [3] the legislature has discretion to adjust industry benefits using its taxing power. The Court affirmed the lower court decision finding the taxes constitutional.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    #13 LUTZ v.

    ARANETA MERCADO
    Topic: Inherent limitations (Public purpose)

    8. CFI dismissed.
    9. Plaintiff appealed directly to this Court.

    FACTS:

    ISSUE: WON the taxes under the Sugar Adjustment Act is


    unconstitutional NO.

    1. The Sugar Adjustment Act was promulgated, with a


    declaration of emergency, due to the threat to our
    industry by the imminent imposition of export taxes
    upon sugar as provided in the Tydings-McDuffie Act and
    the eventual loss of its preferential position in the
    United States market
    2. The purpose of the said Act was to obtain a stabilize and
    readjust the benefits of the sugar industry.
    3. Section 2 of the Act provides for an increase of the
    existing tax on the manufacture of sugar (on each picul
    of sugar manufactured).
    4. Section 3 levies on owners or persons in control of lands
    devoted to cultivation of sugar cane and ceded to other
    for a consideration, on lease, or otherwise a tax
    equivalent to the difference between the money value
    of the rental or consideration collected and the amount
    representing 12 per centum of the assessed value of
    such land.
    5. Section 6 states that all collections shall accrue to the
    Sugar Adjustment and Stabilization Fund and shall be
    paid out only to maintain the sugar industry, to readjust
    the benefits derived from the industry, to limit the
    production of sugar, to afford labor employed in the
    industry.
    6. Plaintiff Lutz, Judicial Administrator of Intestate Estate of
    Ledesma, seeks to recover from the CIR the sum of P14,
    666.40 paid by the estate as taxes under section 3.
    7. Plaintiffs argument: Alleging that such tax is
    unconstitutional being levied for the support of the
    sugar industry exclusively which is not a public purpose.

    HELD:
    1. The basic defect in the plaintiffs position is his
    assumption that the tax provided for in the Sugar
    Adjustment Act is a pure exercise of taxing power.
    2. Section 6 of the Sugar Adjustment Act shows that the
    tax is levied with a regulatory purpose, to provide
    means for rehabilitation and stabilization of the
    threatened sugar industry.
    3. The sugar production is one of the great industries of
    our nation. Hence, its promotion, protection and
    advancement redounds greatly to the general welfare.
    4. It was competent for the legislature to find that the
    general welfare demanded that the sugar industry
    should be stabilized in turn, and in exercise of its police
    power, the legislature could provide that the distribution
    of benefits therefrom be readjusted among its
    components to enable it to resist the added strain of the
    increase in taxes that it had to sustain.
    5. As a public concern, legislative discretion must be
    allowed full play, subject to the test of reasonableness.
    6. Moreover, it appears that taxes be obtained from those
    who are to be benefited from the expenditure of the
    funds derived from it.
    7. It is inherent in the power to tax that a state be free to
    select the subjects of taxation, and it has been
    repeatedly held that inequalities which result from
    singling out of one particular class for taxation, or
    exemption infringe no constitutional limitation.
    8. The Act is purely a tax measure.

    9. AFFIRMED the decision of the CFI.

    DISPOSITIVE: CIR WON.

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