Assesses a separate tax on distributions from designated settlement funds

Showing the cosponsors who are on Agora, A to Z. The official record may list more.

• Democratic7

Shown in neutral colors by design; Agora is non-partisan.

◆ The sponsor's argument

Why Michael Gianaris says this is needed

On May 18, 2026, the United States Department of Justice announced the creation of a $1.776 billion "Anti-Weaponization Fund" as part of a settlement of Donald Trump's $10 billion personal lawsuit against the Internal Revenue Service. The arrangement is without precedent in Ameri- can law. The plaintiff was the President of the United States, suing in his personal capacity together with two of his sons and his family busi- ness. The defendant agency was, and remains, under his direct super- vision. The Acting Attorney General who signed the settlement order, Todd Blanche, served on the President's personal criminal defense team before assuming office. The United States District Court for the South- ern District of Florida was deprived of any meaningful opportunity to scrutinize the terms of the settlement, because the suit was voluntarily dismissed before judgment could enter; the presiding judge, in closing the case, observed that she had been "stripped of jurisdiction" to do otherwise. The result is a $1.776 billion taxpayer-financed compensation program negotiated between the President and officials he himself appointed, drawn from the federal Judgment Fund, and operating outside any judicial supervision. The architecture of the Fund confirms what its origins already suggest. The "Anti-Weaponization Fund" is administered by a five-member commis- sion, all of whose members are appointed by the Attorney General (only one of whom is selected in consultation with congressional leadership) and each of whom may be removed by the President at will. Eligibility criteria have not been published. Acting Attorney General Blanche has testified that the commission will determine for itself who qualifies and that "anybody in this country can apply," and both he and. Vice President Vance have publicly declined to rule out payments to individ- uals convicted of assaulting law enforcement officers during the January 6, 2021 attack on the United States Capitol. Criticism of the Fund has been bipartisan and broad: ninety-three Members of Congress have filed an amicus brief warning that the settle- ment creates a "specter of corruption unparalleled in American history"; the editorial board of the Wall Street Journal has described the Fund as a political payoff to the President's allies; and Capitol Police offi- cers injured defending the Congress on January 6 have filed suit to block the Fund's operation. A portion of the $1.776 billion will, in due course, be distributed to residents of the State of New York. This bill ensures that no New York resident will retain any part of those distributions. A rate of 100% is appropriate because these distributions are not, in any conventional sense, compensation. They are not the product of an adversarial proceed- ing, of findings by a neutral adjudicator, or of any determination of legal liability made by a person outside the President's own circle of appointees. They are transfers of public money, negotiated by the recip- ient class's political patron, drawn from a federal account to which the taxpayers of this State contribute substantially, and disbursed at the discretion of commissioners appointed by---and removable by---that patron. To treat these distributions as ordinary income, subject to the ordinary rates and protections of section 601 of the Tax Law, would be to dignify them as something they plainly are not. New York has long been one of the largest net contributors to the feder- al Treasury in the Union. Its taxpayers should not be required to subsi- dize, and its residents should not be permitted to profit from, a settlement whose foreseeable beneficiaries include individuals convicted of political violence, and whose foreseeable structure is one of patro- nage rather than redress. This legislation reflects the considered judg- ment of the New York State Legislature on that question.

This is the sponsor's own case for the bill, quoted from their memorandum. It is not Agora's description of what the bill does.