Last month, after five bipartisan COVID-19 stimulus bills enacted in 2020, Democrats in the U.S. Senate and U.S. House of Representatives opted to use the budget reconciliation process to approve a partisan sixth stimulus bill. This resulted in a law littered with problems, but one of the worst is a provision inserted at the last minute that functionally prohibits states from cutting state taxes anytime between now and 2024. This is, of course, an egregious abuse of power that eviscerates each state’s constitutional authority to set its own taxation policy.
As we recently explained in detail:
Left-wing politicians, believing that the only constitutional limit on their power is their own desire to not allow a crisis to go to waste, have now deployed COVID-19 relief as a hostile weapon to deprive Red states (conservative, low-tax states) of their sovereign right to lower their tax rates. . . .
Without debate and without so much as a “by your leave,” Speaker Pelosi and Majority Leader Schumer, as part of increasingly emboldened efforts, now seek to transform America from being a constitutional republic committed to the rule of law into a fiefdom run by autocratic bureaucrats. These elite bureaucrats, who despise working class Americans, wish to prevent conservative states from being havens of common sense. The Left is aghast at policies that would include lowering taxes when it makes sense to the state’s citizenry or allowing schools to reopen.
Aside from being horrible public policy and fiscally irresponsible, this provision is blatantly unconstitutional.
Fortunately, states are fighting back. Ohio Attorney General Dave Yost was the first to file a lawsuit, correctly calling the prohibition an unconstitutional attempt to commandeer state taxing authority. Twenty-one additional attorneys general warned of potential legal action, and thirteen states followed that up with a lawsuit filed in Alabama. There are additional legal actions being taken across the country, and we are heartened by the swift action of so many states.
Today, in support of these proper actions to defend states’ rights, we have filed an amicus brief in support of Ohio’s lawsuit and its request for injunctive relief against the ban on states lowering taxes. We are thrilled to have filed this critical brief on behalf of not only our own ACLJ members, but also on behalf of 19 U.S. Senators and 55 Members of the U.S. House of Representatives. We are especially grateful to Senate Finance Committee Ranking Member Mike Crapo (ID), Sen. Tim Scott (SC), and Rep. Jim Banks (IN) for leading this coalition of elected officials.
As we argue in the brief :
The “Tax Mandate” in the American Rescue Plan Act of 2021, Pub. L. No. 117-2, § 9901 (adding § 602(c)(2)(A) to the Social Security Act (42 U.S.C. § 801 et seq.)) (“ARPA”), exceeds Congress’s power under the Spending Clause, U.S. Const. art. I, §8, cl. 1. The conditions, i.e., the “Tax Mandate,” purportedly set by Congress controlling State recipients of the ARPA funds and prohibiting such States from lowering their taxes, exceed the conditioning power recognized by the Supreme Court. If the Tax Mandate is unambiguous, it amounts to an impermissible assault on Ohio’s sovereignty. If it is ambiguous, it fails to pass one of the Supreme Court’s clear limitations on Congress’s conditioning authority. As a result, the ultra vires Tax Mandate is unconstitutional. For this reason, as well as those set forth in Ohio’s Motion for a Preliminary Injunction, any enforcement of the Tax Mandate must be enjoined.
To put it simply, while Congress may condition funding provided to the states, it may not do so in a way that is coercive or that commandeers an authority reserved to the states. This provision clearly runs afoul of these boundaries, as even a tax change that indirectly offsets funding for states under the COVID-19 stimulus bill could trigger a funding clawback by Treasury Secretary Janet Yellen. It is unwise, improper, and unconstitutional.
We have asked the federal district court to grant Ohio’s motion and immediately enjoin enforcement of this unconstitutional coercion. We are also preparing to support the states that are fighting back in Alabama, and we are grateful to the following Members of the U.S. Senate and U.S. House for joining our brief filed in federal district court in Ohio:
U.S. Senators Mike Crapo, Tim Scott, John Barrasso, Marsha Blackburn, John Boozman, Mike Braun, John Cornyn, Kevin Cramer, Ted Cruz, Steve Daines, Bill Hagerty, James Lankford, Roger Marshall, Rob Portman, Jim Risch, Ben Sasse, Thom Tillis, Roger Wicker, and Todd Young.
U.S. Representatives Jim Banks, Robert Aderholt, Rick Allen, Andy Biggs, Gus Bilirakis, Dan Bishop, Lauren Boebert, Kevin Brady, Mo Brooks, Ted Budd, Kat Cammack, Jerry Carl, Buddy Carter, Madison Cawthorn, Steve Chabot, James Comer, John Curtis, Warren Davidson, Byron Donalds, Jeff Duncan, Scott Fitzgerald, Scott Franklin, Bob Gibbs, Bob Good, Lance Gooden, Marjorie Taylor Greene, Glenn Grothman, Michael Guest, Diana Harshbarger, Vicky Hartzler, Kevin Hern, Yvette Herrell, Ashley Hinson, Chris Jacobs, Fred Keller, Doug LaMalfa, Tom McClintock, Dan Meuser, Mary Miller, Blake Moore, Steven Palazzo, Scott Perry, Guy Reschenthaler, David Rouzer, Steve Scalise, Jason Smith, Victoria Spartz, Michelle Steel, W. Gregory Steube, Claudia Tenney, Ann Wagner, Tim Walberg, Michael Waltz, Randy Weber, and Brad Wenstrup.
You can join our ongoing legal efforts to protect states’ rights over taxation policy by signing our petition. It is critically important that the federal government not be allowed to complete this breathtaking power grab.
As we take on new cases to battle President Biden, Speaker Pelosi, and the radical Left’s unconstitutional power grabs, we need your support. Donate today.
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