California Governor Gavin Newsom announced Wednesday that the state will impose a 100% tax on any payments California residents collect from the Trump administration’s $1.776 billion fund for alleged victims of political “weaponization”, a move that would wipe out any financial benefit for recipients in the most populous state in the country.
“Anyone from California who receives any of those funds, we want to tax 100% of those proceeds and that’s an action the state of California can take,” Newsom said. “It’s an action we look forward to taking.”
He did not specify a timeline for enforcement.
The fund itself traces to a legal settlement between President Donald Trump and the Internal Revenue Service, arising from Trump’s lawsuit over the leak of his tax returns. The settlement also permanently bars the IRS from auditing past tax claims by Trump, his relatives, and his businesses.
The arrangement is already under legal assault. Two police officers who defended the U.S. Capitol during the January 6, 2021 riot have filed a challenge against it, putting the fund’s survival in doubt before a single payment goes out.
That hasn’t stopped some pardoned January 6 defendants from tallying up what they’re owed. Trump pardoned more than 1,500 of them last year, and some have begun calculating the costs of their prosecutions, jail time, and lost businesses in anticipation of a payout.
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