California’s Gavin Newsom promises 100% tax on payments from Trump’s 'slush fund' — can he do that?

“There’s widespread, bipartisan agreement that this is bald-faced corruption at its worst,” New York State Sen. Mike Gianaris said of the Anti-Weaponization Fund.

So what does the fund have to do with taxes? Dubbed Trump’s “slush fund” by critics, it’s part of a settlement in which Trump, his sons Donald and Eric and the Trump Organization agreed to drop their suit against the U.S. Treasury and IRS.

In return, the fund allows the President to tap taxpayer dollars to pay out anyone he deems to have suffered “weaponization and lawfare” at the hands of the U.S. government and its legal systems.

It would allow Trump to pay out 1,500 Jan. 6 rioters who stormed the Capitol and were charged with federal offences — including those convicted of violence and seditious conspiracy. Trump has already pardoned rioters. This would give them cash rewards.

In defiance, Gov. Newsom said his state would tax such payouts by 100%.

“That’s an action the State of California can take,” Newsom said. “It’s an action we look forward to taking.”

But can lawmakers impose such an excise tax? Here’s a look at the growing pushback against Trump’s fund and whether a countermeasure like a 100% excise tax could succeed.

Blowback against Trump’s slush fund

Multiple legal experts have declared the Anti-Weaponization Fund illegal.

On May 27, a group of 35 former judges filed a court case against Trump, saying that the nearly $1.8 billion settlement wasn’t mentioned when Trump withdrew his suit against the IRS. The court never got to judge the merits of Trump’s case.

Two police officers who held off rioters during the Jan. 6 insurrection have also launched challenges.

Meanwhile, Newsom is one of a number of lawmakers hoping to use tax law to strike back, and the idea now has now taken hold at the federal level.

On May 21, Senators Ron Wyden and Chuck Schumer introduced the Stop Letting United States Heads Funnel Unauthorized Nontransparent Dollars (SLUSH FUND) Act, which would tax Trump fund payments at 100% at a federal level.

If both federal and state laws go into effect, payment recipients could end up owing more in tax than they were given.

Could these 100% excise taxes go through?

There’s never been a 100% income tax successfully instituted in the U.S, and these laws are likely to be met with pushback. But they’re more legal than they might seem at first glance.