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The American Rescue Plan Act and State Tax Cuts  


Author:  Jonathan L. Entin.


Source: Volume 38, Number 04, Summer 2021 , pp.15-25(11)




Journal of Taxation of Investments

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Abstract: 

The American Rescue Plan Act provides $350 billion in economic assistance to state and local governments over the next four years, but forbids those governments from using that money to offset tax cuts. Several lawsuits challenging the constitutionality of that condition are now pending. Those constitutional challenges should fail under current legal doctrine. Even if they succeed, the plaintiff states might regret that result in the long run.

Keywords: American Rescue Plan Act; state tax cuts; Tenth Amendment; conditional spending; COVID relief

Affiliations:  1: Case Western Reserve University.

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