Newsom signs off on 100% California tax for money from Trump's $1.8-billion 'slush fund'

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Set us as preferred Gov.Gavin Newsom has signed off on a 100% state tax on money any Californians receive from Trump’s $1.8-billion “anti-weaponization” fund for his political allies.Newsom unveiled his proposal in May, after Trump’s Justice Department said it would create a fund to compensate Trump’s allies who claim they have “suffered weaponization and lawfare” under Biden’s Justice Department.

The settlement fund was criticized by politicians on both sides of the aisle, including Sen.Mitch McConnell (R-Ky.), who described it as a “slush fund to pay people who assault cops.” The fund remains in legal limbo.

Earlier this month, a federal judge in Virginia extended a court-ordered block on the plan, which critics warned could be used to pay pardoned Jan.6 rioters.

Fast-tracked into law as part of Senate Bill 122, Newsom’s plan imposes “a tax on any settlement fund payment from the federal Anti-Weaponization Fund, or any subsequent fund, settlement, or agreement, as provided, at a rate of 100%,” according to the bill text.The tax applies to all tax years between 2026 and 2030.

Newsom signed the bill Tuesday.In a statement, his office said the tax is meant to ensure that, should Trump’s fund proceed, California recipients won’t “receive favorable state treatment on those payments.”“We believe democracy is worth defending, the rule of law matters, and public dollars should support victims—not those who attacked the very institutions that protect our freedoms,” Newsom said in the statement.

University of Southern California law professor Ariel Jurow Kleiman, an expert on tax law and policy, said that while Newsom’s tax is a “novel legal strategy,” she believes there is “no categorical legal restriction” preventing California from implementing it.States have a “wide degree o...