March 19, 2021
Biden to states: whatever you do, don’t cut your taxes!
By Nicholas J. Kaster
Hidden away in the American Rescue Plan Act of 2021, the horribly misnamed “COVID relief†giveaway law signed by President Biden, is a curious provision that prohibits states from using any of the federal funds allocated to provide tax reductions to individuals or businesses.
This provision, according to the New York Times, was slipped into the legislation at the last minute.
It reads, in pertinent part,
“A State or territory shall not use the funds provided… to either directly or indirectly offset a reduction in the net tax revenue of such State or territory resulting from a change in law, regulation, or administrative interpretation during the covered period that reduces any tax (by providing for a reduction in a rate, a rebate, a deduction, a credit, or otherwise) or delays the imposition of any tax or tax increase.†[Act Sec. 9901(a), adding Sec. 602(c)(2)(A) to Title VI of the Social Security Act]
As the Wall Street Journal noted:
“Democrats in Washington are trying to dictate to governors and state legislatures that they can't change their tax laws if they accept their share of the $1.9 trillion. The sweeping prohibition would last through 2024, and the bill grants Treasury Secretary Janet Yellen authority to write regulations ‘as may be necessary or appropriate to carry’ it out.
“The language is so expansive that states could be limited from making any changes to their tax codes that reduce revenue even if they don't use federal funds as direct offsets. Much will depend on how Ms. Yellen defines ‘indirectly.’ States that don't comply with her interpretation will have to repay federal funds.â€
more
https://www.americanthinker.com/blog/2021/03/biden_to_states_whatever_you_do_dont_cut_your_taxes.html
