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Republican AGs Just Dropped a Massive Threat on Biden

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When a group of Republican state attorneys general read the 600-plus page of the Democrats ’$ 1.9 trillion American Rescue Plan, they were unhappy, especially since they saw a provision buried deep in the text of the law. which prohibited states from using the money. to reduce taxes.

By law, it states that the money will not be used in the way the Biden administration wants to pay for it.

“This language can be read to deny the state the ability to deduct taxes in any way-even if they provide such tax assistance with or without Covid-19 assistance funds,” a group of 21 who is the attorney general said in a letter Tuesday with Treasury Secretary Janet Yellen.

“Without a smarter interpretation from your department, this provision is worth an unprecedented and unconstitutional approach to the separate sovereignty of States by federal deprivation of essence half of the State fiscal ledgers, ”they wrote, meaning a state’s ability to determine the level of revenue it needs.

The signature on the letter is the attorney general of Alabama, Arizona, Arkansas, Florida, Georgia, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, Oklahoma, South Carolina, South Dakota, Texas, Utah, West Virginia and Wyoming.

Although Yellen has not yet responded, White House press secretary Jen Psaki said Monday that the Biden administration does not want to use the money to cut taxes.

“Thus, the original purpose of state and local funding was to keep police, firefighters, other vital employees at work and working, and it was not intended to reduce taxes,” he said.

But the attorney general said that provisions in question It could “deprive the State of their primary authority to open and enforce basic tax policy.”

“Indeed, such a federal seizure of state tax policy represents the greatest attempt to invade the state sovereignty of Congress in the history of our Republic,” they wrote in a letter to Yellen.

The attorney general noted that the language is “not clear, but potentially surprising.”

“This provision may only be intended to prohibit States from clear obtaining assistance funds in COVID-19 and directly launching them with a tax deduction of a similar amount. But its ban on ‘indirect’ offsetting of income tax deductions, combined with a list of prohibited types of tax deductions (rate deductions, rebates, deductions, credits, or ‘otherwise ‘), may also be read to prohibit tax deductions or mitigation of any stripes, even if completely unrelated to and independent of the availability of assistance funds, “the letter said, noting that many states will receive assistance funds are also in the process of tax deduction in some form.

The letter clarified that the federal government should not order states on financial issues.

“Set aside the total federal overreach inherent in trying to hostage state tax policy in this way. If the broad view of this provision is adopted, it represents an unprecedented and unconstitutional violation in separate sovereignty of the States, “the letter said.

Yellen Letter ni The Western Journal

The letter said state officials know better than Washington Democrats how best to recover their states from the economic effects of the pandemic.

“It is something that demands that money associated with the coronavirus stimulus be spent on the stimulus associated with the coronavirus. It is something else, and beyond the Spending Power of Congress, to prohibit States from providing tax relief. of any kind, for any reason, just to ensure that federal funds are spent for their intended purpose, ”the attorney general wrote.

The letter tried to outline the ripple effects of the states forced to dance in the tone of Washington.

“For example, if citizens want to lower their overall tax burden in the next two election cycles, they cannot choose a candidate for state office who can implement such a policy,” it said.

“Similarly, elected officials who want to spend more funds for the public will now have a ready reason for why excess states cannot be used to reduce taxes: That prohibits Congress, so we’re going to ‘spend’ it.

“Such a system would remove the democratic accountability protected by federalism.”

The attorney general wrote that American system will undercut whether this provision is allowed to stand, saying, “Congress cannot force States to follow certain tax policies at the state level.

“Congress may not micromanage a State’s fiscal policies that violate counter-governance principles or force a State to lose one of its key constitutional functions in exchange for a large check from the federal government,” said the letter.

The letter requests for a response by March 23 or “we will take appropriate further action to ensure that our States have the clarity and certainty necessary to provide for the welfare of our citizens through the implementation and enforcement of equitable tax policy, including tax assistance. “

This article originally appeared on The Western Journal.

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