B. Lifeblood Theory
B. Lifeblood Theory
B. Lifeblood Theory
1. Which theory in taxation states that without taxes, a government would be paralyzed for lack of
power to activate and operate it, resulting in its destruction?
A. Power to destroy theory
B. Lifeblood theory
C. Sumptuary theory
D. Symbiotic doctrine
2. Under the benefits-protection/reciprocity theory, while taxes are intended for general benefits,
special benefits to taxpayers are included.
True or False?
3. Which theory in taxation provides for state's sovereignty, means to give the citizenry an army to resist
aggression, and a navy to defend its shores from invasion?
A. Power to destroy theory
B. Lifeblood theory
C. Necessity theory
D. Symbiotic doctrine
4. Taxation is extraterritorial because it is only within the confines of its territory that a country, state or
sovereign may give protection.
True or False?
5. 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 __________
(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
(C) correct because no government can deprive a person of his livelihood
(D) correct because Congress, in this case, exceeded its power to tax