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    Attorney General Rutledge Leads 13-State Coalition Suing President Biden to Protect State Tax Cuts

    April 1, 2021

    Says, ‘Biden, Harris, and Pelosi don’t have the right to control Arkansas’s tax laws’

    LITTLE ROCK – Arkansas Attorney General Leslie Rutledge co-led a 13-state, bipartisan coalition in filing a lawsuit Wednesday to protect the well-established authority of states to lower taxes for their citizens. The lawsuit argues that the federal government cannot force states to relinquish control of their taxing authority in return for much-needed economic aid related to COVID-19. The tax mandate provision in the latest COVID-19 spending bill bars states from lowering taxes in exchange for relief funds. The lawsuit explains this is one of the most egregious federal power grabs in the nation’s history.

    “President Biden’s latest COVID spending bill blocks our state from reducing Arkansans’ tax burden,” said Attorney General Rutledge. “Biden, Harris and Pelosi don’t have the right to control Arkansas’s tax laws and the Constitution does not allow such blatant federal overreach.”

    The complaint argues that the tax mandate provision could be used to claw back a share of Arkansas’s stimulus allotment. This creates an impermissible chilling effect on state lawmakers’ willingness to reduce the tax burdens on their citizens.

    Before filing this lawsuit, members of the coalition asked U.S. Treasury Secretary Janet Yellen to confirm the legislation would not strip states of their taxing authority. However, her response did not place any limits on the vague provision – uncertainty that she admits exists in referring to the ambiguity as a “thorny” issue in testimony to Congress.

    Attorneys general filed the lawsuit against the U.S. Department of Treasury, Secretary Yellen and the Department’s Acting Inspector General Richard K. Delmar, who would be responsible for seeking any potential claw back of federal funds.

    The lawsuit attacks this unconstitutional exercise of federal power as violating the 10th Amendment, particularly the conditional spending doctrine and the anti-commandeering doctrine.

    The attorneys general seek a court order that prohibits enforcement of the federal tax mandate and declares it unconstitutional.

    Arkansas co-led the coalition with West Virginia and Alabama with support from Alaska, Florida, Iowa, Kansas, Montana, New Hampshire, Oklahoma, South Carolina, South Dakota and Utah.

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