Julia Rock, a reporter for The Daily Poster, on Friday sought to explain why Republicans are upset about a last-minute provision added to the $1.9 trillion coronavirus relief bill that would limit states’ abilities to implement certain types of tax cuts.
Speaking on Hill TV’s “Rising,” Rock was discussing a provision of the American Rescue Plan that distributed $350 billion to help states and local governments offset the costs of dealing with the pandemic.
However, governments that implement tax cuts that lead to net revenue loss will have to pay the federal government back the lost revenue.
The measure has drawn the anger of Republicans with Ohio Attorney General Dave Yost (R) filing a federal lawsuit in Ohio seeking to enjoin the Biden administration from enforcing the provision.
“I think what these governors or Republican state lawmakers would say is during a crisis, what people need is basically less of a tax burden,” Rock said, noting that the GOP could point to tax cuts that were included in the 2009 American Recovery and Reinvestment Act. “Their argument would be tax cuts have a stimulus effect.”
“That’s not really true. After 2009, there was a big Congressional Budget Office report that found that the provisions of the 2009 stimulus that had the biggest economic multiplier were the direct aid or to state and local governments, and not tax cuts. But the argument would be that we need to cut taxes in order to stimulate our economies,” she said.
Watch part of Rock’s interview above.
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