Thirteen states are joining forces to sue President Joe Biden’s administration over his power grabbing American Rescue Plan which banned states from cutting taxes if they received COVID-19 relief funds.
The Daily Caller reports: “The 13-state coalition argued that the provision included in the Democrats’ $1.9 trillion coronavirus relief package preventing states from cutting taxes if they accept relief from the federal government is unconstitutional. The coalition, led by Republican West Virginia Attorney General Patrick Morrisey, filed the federal lawsuit Wednesday evening in the U.S. District Court for the Northern District of Alabama.”
In a statement released on Wednesday, Morrisey said, “Never before has the federal government attempted such a complete takeover of state finances. We cannot stand for such overreach.”
“The Constitution envisions co-sovereign states, not a federal government that forces state legislatures to forfeit one of their core constitutional functions in exchange for a large check equal to approximately 25 percent of their annual respective general budgets,” Morrisey added.
The lawsuit explains that the tax provision is “one of the most egregious power grabs” in U.S. history, adding that the Tenth Amendment doesn’t allow the federal government to stretch their authority like the Biden Administration is doing.
Check out what the Daily Caller reported:
The provision says states cannot use relief funds to offset tax revenue by reducing taxes. It specifically prevents states from offsetting tax revenue by “cutting rates or by giving rebates, deductions, credits, or otherwise.”
The vague wording of the provision buried more than 200 pages into the rescue plan creates a chilling effect for states, which seek to reduce tax burdens on their citizens, according to the lawsuit.
West Virginia, Alabama, Alaska, Arkansas, Florida, Iowa, Kansas, Montana, New Hampshire, Oklahoma, South Carolina, South Dakota and Utah are listed as plaintiffs. Treasury Secretary Janet Yellen and Treasury Department Inspector General Richard Delmar are the listed defendants.
Back in mid-March, 21 states threatened to pursue legal action against Biden if he failed to change the policy.
“It is well established that Congress may place such reasonable conditions on how States may use federal funding,” Yellen said while responding to the letter.
“If States lower certain taxes but do not use funds under the Act to offset those cuts-for example, by replacing the lost revenue through other means-the limitation in the Act is not implicated,” Yellen added.
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