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Twenty-one Republican attorneys general have threatened to take legal action against the Biden administration over “unprecedented and unconstitutional” limits imposed in the coronavirus relief bill on states’ ability to cut taxes .
Attorneys General made the threat in a letter to the administration on Tuesday, just days after President Joe Biden signed the $ 1.9 trillion (£ 1.3 trillion) bill.
In the seven-page letter sent Tuesday to Treasury Secretary Janet Yellen, the 21 GOP officials argued that part of the funding for the relief program that helps states offset the costs of the pandemic is limiting their ability to reduce Taxes.
Republican officials referred to the American Rescue Plan, a $ 350 billion (£ 251 billion) jar that was set aside as part of the bill to help cash-strapped areas affected by the closure of the hospitality sector and mass unemployment caused by the pandemic.
As part of negotiations on the bill, congressional lawmakers agreed to prevent states from using federal funds for local tax cuts, with press secretary Jen Psaki explaining on Monday that the pot of 350 billion dollars is for “cops, firefighters and other essential workers on the job.” and employees ”, 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 American Rescue Plan Act does not prohibit states from generally giving tax breaks through the types of measures listed ”.
Attorneys general, from states such as Arizona, Georgia and West Virginia, have said that if the Biden administration does not confirm states’ ability to cut taxes, then the bill “would represent the most great invasion of state sovereignty by Congress in history. of our Republic ”.
Officials then threatened to take “further appropriate measures” because The Washington Post reported that several state officials were already discussing a possible trial.
However, a White House official told The Post on Tuesday evening that Congress had acted appropriately by stipulating certain conditions for areas receiving bailout funding.
The official confirmed that the bill “does not say that states cannot cut taxes at all,” adding that it “simply orders them not to use this money to make up for the loss of net income if the State chooses to reduce taxes ”.
Mr Biden and Vice President Kamala Harris have toured the United States over the past week to tout the benefits of the US bailout.
Speaking on the landmark bill on Monday, Biden said: “It’s one thing to pass a landmark law like the US bailout, and quite another to implement it,” before adding: “The devil is in the details.”.
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