The Columbus-based Buckeye Institute this week filed an amicus brief in the federal court case challenging the authority the Biden administration has asserted to limit state tax-reduction efforts.
Opponents of the White House policy are urging the U.S. Court of Appeals for the Fifth Circuit to rule in Texas v. Yellen that a provision of the American Rescue Plan Act (ARPA) cannot condition states’ receipt of federal aid on accepting “ambiguous” federally prescribed tax policy. Plaintiffs and their supporters further argue that President Joe Biden and his treasury secretary Janet Yellen cannot invoke their regulatory power to fix ARPA’s lack of clarity.
Petitioners, which include the states of Louisiana, Mississippi, and Texas, oppose a part of ARPA barring states from using federal money disbursed through the 2021 law to “either directly or indirectly offset a reduction in the net tax revenue” by taking any action resulting in lower tax revenues. In its brief in support of the aggrieved states, Buckeye insists that the provision is too vague and violates the U.S. Constitution’s separation of federal and state powers.
“What precisely this language proscribes is anyone’s guess, as practically any action by a State may, intentionally or not, reduce tax revenues,” the brief states. “But if Congress wishes to impose conditions on States’ receipt of federal funds, it must do so ‘unambiguously,’ so as to enable a State to ‘ascertain what is expected of it’ before deciding whether to accept funding.”
Texas v. Yellen is the latest of several lawsuits in which Buckeye has added its voice to petitions against ARPA’s anti-tax-cut section. Other states challenging the policy include West Virginia, Arizona and the institute’s home state of Ohio. In the West Virginia and Ohio cases, courts agreed with the plaintiffs that the Biden administration’s tax mandate was impermissibly unclear.
“As The Buckeye Institute has argued and several courts have already ruled, Congress must act clearly if it is applying conditions to a state’s receipt of federal funds and — in the case of this tax mandate — Congress failed to do so,” Buckeye Institute case attorney and President Robert Alt said in a statement. “What is clear, however, is that with this federal tax mandate, the Biden Administration has attempted the most sweeping usurpation of state taxing authority in U.S. history.”
Alt and his co-counsel Andrew Grossman expressed confidence that the Fifth Circuit will side with them against the federal government’s stipulation.
– – –
Bradley Vasoli is a writer at The Ohio Star. Follow Brad on Twitter at @BVasoli. Email tips to [email protected].
Photo “Joe Biden and Janet Yellen” by Joe Biden.
