No New Tax Cuts? Examining the Rescue Plan's New State Tax Limits

Authors

Conor Clarke, Washington University in St. Louis School of LawFollow
Edward Fox, University of Michigan Law School

Document Type

Article

Language

English (en)

Publication Date

2022

Publication Title

Tax Notes State

Abstract

In this article, Clarke and Fox examine the American Rescue Plan Act’s restrictions on state tax cuts, arguing that the restrictions are a variation on more familiar maintenance-of-effort provisions. These provisions are common, and are designed to help ensure that federal grants supplement rather than supplant state spending by requiring the state to maintain its level of spending on a program. Clarke and Fox conclude that the Rescue Plan’s requirements create similar incentives, and argue that the similarity makes it more likely that the act’s tax provisions are consonant with the Constitution’s spending clause.

Keywords

American Rescue Plan Act, State Taxes, Spending Clause, Federal Appropriations

Publication Citation

Conor Clarke & Edward G. Fox, No New Tax Cuts? Examining the Rescue Plan’s New State Tax Limits, 103 Tax Notes St. 1361 (2022)

Repository Citation

Clarke, Conor and Fox, Edward, "No New Tax Cuts? Examining the Rescue Plan's New State Tax Limits" (2022). Scholarship@WashULaw. 676.
https://openscholarship.wustl.edu/law_scholarship/676