Lawsuit Seeks to Stop Pelosi’s Path to Higher State Taxes

March 18, 2021 — Blog    — Coronavirus Bulletin    — Oversight    — Press Releases    — Select Revenue Measures   

Ohio’s attorney general is suing the Biden administration over the new $1.9 trillion spending bill’s unconstitutional attack on states’ ability to set their own tax policies.

From The Washington Post:

  • The “stimulus law opened the door for cash-strapped local governments to tap federal aid to pay for expenses, including for first responders, although it prohibited states from using the money to directly or indirectly offset new tax cuts.”
  • “To Ohio, though, the restriction on cutting taxes is overly broad, putting states that had planned any tax cuts — even those that predate the pandemic — in jeopardy of losing access to the federal relief money. Yost said the federal government had no right to make a such demand, and the attorney general asked a federal court in Ohio to grant a preliminary injunction preventing the portion of the stimulus law from being enforced.”
  • “The Tax Mandate thus gives the States a choice: they can have either the badly needed federal funds or their sovereign authority to set state tax policy. But they cannot have both. In our current economic crisis, that is no choice at all,” Ohio’s lawyers wrote in the court filing.

Ways and Means Republicans sent a letter on Wednesday noting that Washington shouldn’t — and can’t — veto state tax cuts. Attorneys General of 21 other states also sent a letter urging Treasury to confirm that the the $1.9 trillion spending bill “does not strip states of their core sovereign authority to enact and implement basic tax policy.”