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Brady, Crapo Press Treasury for Clear Guidance on Democrats’ Ban on State Tax Cuts

March 25, 2021

WASHINGTON–Treasury Secretary Janet Yellen has so far provided little information in response to 21 state Attorneys General, who raised concerns in a March 16 letter about a provision in recently enacted COVID-19 response legislation that could severely restrict states’ ability to provide tax relief to local workers, families, small businesses, and farms.

“The response to concerns raised by the state Attorneys General or in our letters has so far been entirely inadequate,” said Rep. Kevin Brady (R-TX), Republican Leader of the House Committee on Ways and Means, and Senator Mike Crapo (R-ID), Republican Leader of the Senate Finance Committee. “As states make important fiscal decisions about how to crush the virus and help businesses and workers, there can be no room for confusion about this unconstitutional law that allows Washington to intimidate states into a tax relief ban for the next three years. Treasury must provide prompt and clear guidance to avoid undermining states’ authority to design their own tax system.”

Rep. Brady added, “While Secretary Yellen has promised to help Democrats provide windfall tax breaks for the rich through repeal of the SALT cap, I hope she will be equally interested in confirming that states retain the authority to provide tax relief for low- and middle-income workers, taxpayers, and Main Street businesses fighting to survive the COVID lockdowns.”

Senator Crapo said, “I urge Treasury Secretary Yellen to issue clear guidance and begin to engage in clarifying discussions immediately with Members of Congress from both sides of the aisle, as her predecessor did in a remarkably timely fashion with Coronavirus Relief Funds provided in the bipartisan CARES Act.”

Click here to read the letter sent to Treasury by Ways and Means Republicans noting that Washington shouldn’t — and can’t — veto state tax cuts.

Click here to read the letter sent to Treasury by Senator Crapo (R-ID), Ranking Member of the Senate Finance Committee.

Click here to read the letter from Attorneys General of 21 states urging Treasury to confirm that the $1.9 trillion spending bill “does not strip states of their core sovereign authority to enact and implement basic tax policy.”

Click here to read about the Ohio attorney general suing the Biden administration over the new $1.9 trillion spending bill’s unconstitutional attack on states’ ability to set their own tax policies.