The Buckeye Institute Files Brief in Ohio v. Yellen Standing Up for Taxpayers Against Biden’s Tax Mandate

Apr 12, 2021

Columbus, OH – On Friday, The Buckeye Institute filed its amicus brief in Ohio v. Yellen calling on the United States District Court for the Southern District of Ohio to stop enforcement of the federal tax mandate, which was included in the American Rescue Plan Act (ARPA).

“In a sweeping disregard for the principle of federalism, the Biden administration has run roughshod over the authority of States to manage their own affairs,” said Robert Alt, president and chief executive officer of The Buckeye Institute. “Congress imposed an ambiguous and open-ended requirement on States to give up unprecedented authority to determine their own tax policy. ARPA’s vague language could impact everything from tax rates to any of a myriad of policies that indirectly impact tax collections—which is to say, almost any law passed by Ohio’s General Assembly. Without clear and unambiguous language of what the States are permitted and what they are forbidden, this condition is unenforceable and must be overturned.”

In its brief, The Buckeye Institute agrees with Ohio Attorney General Dave Yost that Congress lacks the authority to usurp state taxing authority, but Buckeye also notes that the court does not have to rule on this matter given the vagueness of the text in the ARPA. “Whatever the extent of Congress’s power in this area in the abstract, this enactment falls far short of the clarity required for Congress to intrude on States’ traditional sovereign authorities.”

Buckeye’s brief goes on to underscore that the federal tax mandate raises serious questions about many of Ohio’s policies. For example, Governor Mike DeWine’s recent proposal to use money from ARPA to pay down Ohio’s $1.46 billion unemployment debt—which would offset tax increases for employers—could be a violation of the tax mandate. So, too, could Ohio’s practice of offering tax subsidies to businesses that agree to add new jobs—something The Buckeye Institute opposes but remains common practice by state governments nonetheless. Ohio’s Sales Tax Holiday, or any changes to it, could also violate the mandate. “The same could be said of most any policy that implicates taxes, directly or indirectly. There is no way for the State to know whether the Tax Mandate permits it to do any of these things.”

# # #

UPDATE: July 1, 2021, U.S. District Court for the Southern District of Ohio blocked the Biden Administration’s tax mandate that prohibited states accepting federal COVID relief funds from enacting tax cuts. The decision agrees with The Buckeye Institute’s two briefs in the case which argue that the tax mandate is fundamentally unclear and therefore unenforceable and that the treasury secretary cannot fix Congress’s error through regulatory action. See Buckeye’s statement reacting to the decision here.