Full Breakdown
States Target Trump’s Anti-Weaponization Fund with 100 % Tax Proposals
5/28/2026, 4:44:43 AM
State Tax Initiatives Target the Fund
California Governor Gavin Newsom and New York Assemblymember Alex Bores announced plans to impose a 100 percent state income tax on any resident who receives a payment from the Justice Department’s “anti-weaponization” fund. The proposals would strip recipients of any net benefit. Senate Democrats have introduced a parallel federal bill that would levy a 100 percent excise tax on the same payouts, with an additional 50 percent penalty for evasion.
Origin of the Anti-Weaponization Fund
The fund was created in early May as part of a settlement in which former President Donald Trump dropped a $10 billion lawsuit against the Internal Revenue Service. In exchange, the Department of Justice established a pool of roughly $1.7 billion to $1.8 billion—cited as $1.776 billion in some reports—to compensate individuals who claim they were “weaponized” by federal investigations. A commission will review claims through 2028, and the DOJ says eligibility is not limited by party affiliation or by the January 6 Capitol attack.
Key Proponents and Legislative Sponsors
- Gavin Newsom, Governor of California (Democrat) – public advocate of the 100 % tax.
- Alex Bores, New York State Assemblymember (Democrat) – author of the “Anti-Insurrectionist Act.”
- Ron Wyden, Senate Finance Committee Ranking Member (Democrat) – co-sponsor of the federal tax bill.
- Chuck Schumer, Senate Majority Leader (Democrat) – co-sponsor of the federal bill.
- Todd Blanche, Acting Attorney General (DOJ) – defender of the fund’s non-partisan intent.
- Brian Fitzpatrick, Republican Representative from Pennsylvania – vocal opponent.
- Ted Cruz, Republican Senator (Texas) – noted internal GOP dissent.
Numbers Behind the Debate
- Fund size: reported as $1.7 billion, $1.8 billion, and $1.776 billion across sources.
- Potential recipients: roughly 1,600 defendants charged or convicted in the January 6 attack; 80–90 of those reside in New York.
- Tax proposals: 100 % state income tax in California and New York; 100 % federal excise tax with a 50 % evasion penalty.
- First claimant: political operative Michael Caputo seeks $2.7 million.
Official Statements & Responses
Newsom said California “will tax 100 % of any proceeds” from the fund, framing the move as a state-level safeguard against rewarding political allies. Bores described the New York bill as a means to ensure “no resident of this State is enriched” by what he called a “publicly-funded political payout.” Wyden labeled the fund “staggeringly corrupt,” while Schumer argued taxpayers should not finance payments to “allies, cronies, and insurrectionists.” Blanche emphasized that the fund “is not limited to Republicans… not limited to the Biden weaponization… not limited in any way… to January 6.” Fitzpatrick warned that Republicans “are going to try to kill it,” and Cruz reported that about half of Senate Republicans expressed unhappiness with the fund.
Opposition and Legal Concerns
Republican lawmakers question the constitutionality of taxing a specific federal payment at a 100 % rate, suggesting it may exceed state taxing authority. Legal scholars anticipate challenges over whether the fund itself complies with statutory limits on federal spending. Critics also argue the fund could be used to reward participants in the Capitol riot, a claim the DOJ disputes. Overlapping state and federal taxes could create double liability, potentially wiping out any payout entirely.
Conflicting Reports & Gaps
Sources differ on the exact fund amount ($1.7 billion vs $1.8 billion vs $1.776 billion). Eligibility criteria remain vague; while DOJ officials assert no partisan restriction, critics cite the presence of Jan 6 defendants among potential claimants. No definitive legal analysis has been offered on whether a state can impose a tax targeting a single federal program, leaving a key uncertainty for courts.
Verbatim Quotes
- “Anyone from California that receives any of those funds — we want to tax 100% of those proceeds,” — Gavin Newsom, Governor of California
- “If you storm the Capitol and you take from this slush fund, too bad we’re taking it.” — Alex Bores, New York Assemblymember
- “staggeringly corrupt,” — Ron Wyden, U.S. Senator (WA)
- “allies, cronies, and insurrectionists.” — Chuck Schumer, U.S. Senate Majority Leader
- “It's not limited to Republicans. It’s not limited to the Biden weaponization. It's not limited in any way, scope or form to January 6th, or to Jack Smith,” — Todd Blanche, Acting Attorney General
- “Bad news. We're going to try to kill it. We're considering legislative options. We're going to write a letter to the AG [attorney general] to start, but we're considering a legislative option. We're trying to unpack what exactly the legal machinations are, but—he can't do that.” — Brian Fitzpatrick, U.S. Representative (PA)
What’s Next
Both California and New York are expected to introduce formal tax legislation in the coming weeks. The Senate’s federal bill will undergo committee markup before a full vote. Anticipated court challenges could address the constitutionality of targeted 100 % taxes and the legality of the fund itself. Outcomes will shape whether any payouts from the anti-weaponization fund can ultimately reach claimants.
