TAX 9900 Chapter Notes - Chapter 1: Gross Receipts Tax, Equal Protection Clause, Bill De Blasio

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12 Mar 2020
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Review QuestionsWeek One
Mayor DeBlasio wants to raise taxes on “the richest New Yorkers” to pay for pre-
kindergarten classes for the City’s children.
1. Would limiting the income tax rate increase to people making $500,000 a year be
a denial of equal protection clause of the United States Constitution?
2. Instead of limiting the tax rate increase to people making over $500,000, the
provision was further modified to include only Caucasian males making over
$500,000 a year. Would this provision violate the equal protection clause of the
United States Constitution?
a. Hutchinson River Parkway III, a rich Caucasian guy living on Sutton Place,
brings an action in Federal District Court to enjoin the tax from being
collected. Mr. Parkway would pay more taxes under the law. Does this
federal court have the jurisdiction to issue an injunction?
3. Instead of raising individual tax rates, DeBlasio instead raises the corporate tax
rate paid by companies located on the west side of Manhattan (west of Fifth
Avenue). Would this provision violate the equal protection clause of the United
States Constitution? The reason offered for this classification is the need to
encourage more business activity on the east side of the island.
4. The DeBlasio tax bill is approved by the City Council and is signed into law by
the Mayor. No actions were taken by the New York State legislature or by
Governor Cuomo. Can the City law be enforced?
a. The Congress in Washington approves the DeBlasio bill (still without
action by the NY legislature) and the bill is signed into law by President
Obama. Can the City law be enforced?
5. After enabling legislation is passed by the State, the City adopts a tax law
asserting a 2% gross receipts tax on internet companies. Five days later, the
Congress passes a law (signed into law by the President) that forbids states and
there political subdivisions from enacting and levying gross receipts taxes on
internet companies. Can the City law be enforced and why?
6. After enabling legislation is passed by the State, the City adopts a tax law
asserting a 2% gross receipts tax on internet companies. There is no federal
statute forbidding this. Notwithstanding this silence, can the New York Court of
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