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US Federal Constitution QUESTION #5809
Question 1
To reduce the federal deficit, Congress passes a law that taxes the gross receipts of all state-operated lotteries at a rate of 25%. A state that uses its lottery revenue exclusively for public education sues to enjoin the tax, claiming it violates the Tenth Amendment. Is the tax constitutional?
  • Yes, because the tax is uniform across all states and falls within the taxing power.✔️
  • Yes, because the Tenth Amendment does not protect state-run commercial activities from federal taxation.
  • No, because the tax targets a specific state function and interferes with state sovereignty.
  • No, because the tax is not for the general welfare as it depletes educational funding.
Correct Answer Explanation
Under the Taxing and Spending Clause, Congress has broad power to tax. A tax is generally valid if it is geographically uniform and reasonably related to revenue production. The Tenth Amendment rarely limits federal taxes that apply to state-owned businesses unless they are uniquely discriminatory or destructive to state existence.