Scope of taxation

It is a settled principle that the power of taxation by the state is plenary. Comprehensive and supreme, the principal check upon its abuse resting in the responsibility of the members of the legislature to their constituents. However, there are two kinds of limitations on the power of taxation: the inherent limitations and the constitutional limitations. One of the inherent limitations is that a tax may be levied only for public purposes. (G.R. No. 166006)

Subject to constitutional and inherent restrictions, the power of taxation is regarded as supreme, unlimited and comprehensive. The principal check on its abuse rests only on the responsibility of the members of the legislature to their constituents.

The taxing power of a state is one of its attributes of sovereignty. And where there has been no compact with the Federal government, or cession of jurisdiction for the purposes specified in the Constitution, this power reaches all the property and business within the state, which are not properly denominated the means of the general government; and, as laid down by this court, it may be exercised at the discretion of the state. The only restraint is found in the responsibility of the members of the legislature to their constituents. (Nathan v. Louisiana. 49 U.S. 73)

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