Twenty-one Republican attorneys general have threatened to take legal action against the Biden government over the “unprecedented and unconstitutional” limits imposed on the coronavirus relief bill on the ability of states to reduce taxes.
The attorney general made the threat in a letter to the administration on Tuesday, just days after President Joe Biden signed the $ 1.9 billion (£ 1.3 billion) bill.
In the seven-page letter, which Janet Yellen sent to the Treasury Secretary, the 21 GOP officials argued that parts of the funding in the aid package that help countries reimburse the cost of the pandemic, their ability to tax to lower, limit.
Republican officials cited the U.S. rescue plan, a $ 350 billion (£ 251 billion) pot set aside as part of the bill to help cash-strapped areas affected by the closure of the hospitality sector and cause massive unemployment by the pandemic.
As part of negotiations for the bill, congressional lawmakers agreed to restrict states from using federal funds for local tax cuts, with press secretary Jen Psaki explaining Monday that the $ 350 billion pot is intended for police, firefighters and others. essential employees at work. and appointed ”, and“ was not intended to reduce taxes ”.
However, in their letter to Ms Yellen on Tuesday, officials condemned the restriction and asked “that you confirm that the U.S. Rescue Plan Act does not prohibit states from providing tax relief in general through the aforementioned measures.”
The Attorney General, of states such as Arizona, Georgia and West Virginia, said that if the Biden administration did not confirm the ability of states to make tax cuts, then the bill would be ‘the biggest invasion of state sovereignty by Congress in history represents ‘of our Republic’.
The officials then threatened to take ‘appropriate additional action’, such as The Washington Post reports that several government officials are already talking about a possible lawsuit.
However, a White House official told the Post on Tuesday night that Congress had acted appropriately to set certain conditions for areas receiving funding as part of the rescue plan.
The official confirmed that the bill “does not say that states can not reduce taxes at all”, adding that it “is simply instructed not to use that money to compensate for the lost net income if the state prefers to tax to reduce “.
Mr. Biden and Vice President Kamala Harris toured the U.S. last week to name the benefits of the U.S. bailout plan.
On the historic piece of legislation on Monday, Mr. Biden said, “It’s one thing to pass a historic piece of legislation like the U.S. bailout plan, and it’s a whole other thing to carry it out,” before adding, “The devil is in the details.”