Democrats slip sneaky little rider into stimulus bill to forbid states from cutting taxes

The Democrats’ $1.9 trillion stimulus bill is a monster of public spending with the prime aim of rewarding political cronies. Free-spending blue cities and states get bailouts, along with unions with mismanaged gold-plated pensions for their members. The losers, of course, are the savers and taxpayers. That’s because it won’t be long before Argentina-style inflation and Europe-style taxes kick in to pay for these benefits to leftists.

The only hope is to grow the economy so that the debt can be paid, which is something Americans often know how to do.

But unlike other bills, this one contains a poison pill, to ensure that red states and cities inclined to cut taxes are stopped dead in their tracks.

Reason magazine’s Eric Boehm has located and identified this slimy, sneaky little rider:

Buried within the $1.9 trillion emergency spending bill that Congress sent to President Joe Biden’s desk on Wednesday is a provision that could effectively block states from cutting taxes if they accept federal bailout dollars.

That provision, added to the bill by the Senate last week, could put a halt to several states’ plans to cut taxes this year as a way to stimulate economic growth following the COVID-19 pandemic. Depending on how the text is interpreted, the measure could also make it illegal for states to create new tax credit programs like the ones that have become a popular mechanism for expanding school choice. Critics say this expansion of federal control over state policymaking is murky at best, and potentially unconstitutional.

Darn right, it’s unconstitutional. If a state can’t cut taxes, what exactly can it do? 

It amounts to a Democrat bid to not just shovel other people’s money, but that little thing that comes with money, which is control. Conditionality. Power. In exchange for passing this monopartisan spending bill, their aim is not just to bail out blue cities and states at the expense of red ones, but to make red cities and states as overtaxed and badly run as blue ones.

And don’t think this isn’t an issue. Democrat-run blue states are hemorrhaging people. The COVID lockdowns have cut the benefits of living in big blue cities by shutting down all economic and social activity and forcing workers into their homes. A lot are realizing they don’t need to work in giant cities any more, so the crime and high taxes they pay are starting to matter. 

According to this January 2020 editorial in the Wall Street Journal:

 Four states have lost population since 2010 including West Virginia (-3.3%), Illinois (-1.2%), Vermont (-0.3%) and Connecticut (-0.2%), but 10 experienced declines last year. New York was the biggest loser as a net 180,000 people left for better climes. Over the last decade New York has lost more of its population to other states (7.2%) than any other save Alaska (8%), followed by Illinois (6.8%), Connecticut (5.6%) and New Jersey (5.5%).

Hmmm, what do these states have in common? Large tax burdens and politically powerful public unions. Illinois’s property tax rates are the second highest in the country after New Jersey. The state lost $5.6 billion in adjusted gross income last year to other states, about twice as much as in 2012. Notably, income outflow hasn’t increased from Michigan or Wisconsin.

And when businesses and people flee these blue states, Democrats actually cheer. Remember this toad from California, who used filthy language to urge California’s last remaining car manufacturer, eco-friendly Tesla, no less, to flee with good riddance? These creatures are out there, and they say what they think. Democrats often claim they’re happy to see people fleeing their states and enact no policies to stop it, but the partying stops when they realize the consquences: Lost congressional seats. They don’t say so openly, but that little issue concentrates their minds. So what better than to stop the low taxes that are bringing blue-state population into red states? Make them all as badly run as blue states so no one will flee? That’s what is behind this creepy little embedded rider in this monstrous spending measure.

It’s a slimy little conditionality that has no basis in constitutional law. No more laboratory of the states, it seems, with one showing the others what to do if one values prosperity, and another showing what not to do. They want all the states to be run the same — like Democrat blue states, with nobody having any reason left to flee.

It’s a upside down economics for sure. Because just as cronies are rewarded for their bad behavior, ensuring more of it, well run red states who are paying for this are being hit with conditionality as if they’re the ones who’ve done something bad.

In normal economies, badly run blue cities and states getting bailouts should be the ones subject to conditionality, such as ‘live within your means,;  just as badly run or speculator-hit nations under the thumb of IMF money are subject to such conditions in exchange for their bailouts, but in this upside-down bailout, the opposite is the case.

Red states that cut taxes are subject to conditionality, not blue ones. Blue ones are set to party hearty and continue the same free-spending ways that got them into trouble in the first place. For leftists, that’s virtue rewarded.

Economically ravaged red states should challenge the hell out of this vile power grab to end the laboratory of the states. After all, since red states contribute mightily to this leftist bailout pot, they have a right to have some share in how this money is distributed. The alternative is for every red city to become Portland, New York or Minneapolis, and every red state to become New York, Illinois, or California. These red cities and states should proceed carefully as they challenge this, avoiding emotion-laden issues such as school choice (which will bring out the our-children-are-in-danger ads from powerful money-larded teachers unions) and focus on some aspect of their economies, (such as tax cuts for small business) that teachers’ unions can’t counter. That will allow the courts to rule on this pork bill’s constitutionality rather than ride the polls and Democrat narratives, given the weakness of our judges.

Democrats have tried this kind of our-law-is-permanent stuff before and two instances spring to mind: One is the Harry Reid rider in the original 2010 Obamacare passage which claimed no state can repeal the passage of the detested mono-partisan law on its death panels, which the San Francisco Examiner blasted in this editorial.

The other is the blue states’ claim to sanctuary cities and states, claiming to override federal law as if no federal law ever mattered. In this legal discussion, the lawyers bring up that judges often ruled that Congress needed to pass laws to enforce federal  law, instead of enforcement by feds with executive orders. But that ignores the baseline federal immigration laws themselves, which were passed by Congress in the first place.

If nothing else, the whole thing shows the Democrats’ full blown hypocrisy on whether the feds or the states have the control. If cities and states are blue, they have control., if they are red, the feds have control. Thats their position. And this slimy little power grab against red cities and states should be challenged in every court, because it’s nothing but a power grab.

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