(Joshua Paladino, Headline USA) A federal court ruled that President Joe Biden’s Treasury Department cannot enforce its “Tax Cut Ban” on states that accepted federal bailout funds, which aimed to alleviate budget shortfalls from COVID-19 lockdowns, WND reported.
“All federal courts…to date have held that Congress cannot use its spending power to intrude upon the states’ sovereignty and dictate to them that they may not cut state taxes, even indirectly,” said Peggy Little, the New Civil Liberties Alliance’s senior litigation counsel.
The District Court in the Northern District of Texas became the third court to rule that the federal government cannot manipulate the states’ budget and tax policies. The complaint, Texas, et al, v. Yellen, ended the same ways as cases in Ohio and West Virginia.
“These courts have fulfilled their duty to enforce the Constitution and stop Congress from controlling state budget matters leagues beyond the enumerated powers conferred upon the national legislature by the Constitution,” Little said.
The American Rescue Plan Act, which awarded states $200 billion to cope with disastrous lockdowns, mandated that states accepting the federal dollars could not use them “to either directly or indirectly offset a reduction in the net tax revenue” from tax cuts.
ARPA also gave Congress the unconstitutional power to recover funds that states used to cover budget shortfalls resulting from tax cuts.
“Congress exceeded its Spending Clause authority and violated the anti-commandeering doctrine when it enacted” the bill, Judge Matthew Kacsmaryk, a Trump appointee, ruled.
Kacsmaryk’s decision followed Supreme Court rulings, which found that the federal government cannot offer states money with “a gun to the head.”
“Of all the powers the Constitution reserves to the States, there is no power more central to state sovereignty than the power to tax,” Kacsmaryk wrote.
