Comments

Clarke, Conor and Fox, Edward G., No New Tax Cuts? Examining the Rescue Plan's New State Tax Limits (March 28, 2022). Tax Notes State, March 28, 2022, p. 1361, U of Michigan Law & Econ Research Paper No. 22-017, U of Michigan Public Law Research Paper No. 22-017, Available at SSRN: https://ssrn.com/abstract=4099830

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.

Disciplines

Law and Economics | Public Law and Legal Theory | Tax Law

Date of this Version

2022

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