Full Breakdown
New York Bill Proposes 100% Tax on Federal Anti-Weaponization Fund Payouts
6/2/2026, 4:42:58 AM
Core Event: Legislative Proposal to Tax Settlement Payouts
Democratic state legislators State Senate Deputy Leader Michael Gianaris and Assembly Member Alex Bores introduced S10585/A11503, the “Anti-Insurrectionist Act,” which would impose a 100 percent tax on any distribution from the federal Anti-Weaponization Fund to New York residents. The tax allows no deductions or credits, and all revenue would be deposited into the state’s General Fund.
Background: Lawsuit, Settlement, and Creation of the Anti-Weaponization Fund
The fund stems from a $10 billion personal lawsuit filed by former President Donald Trump, his family business, and two of his sons against the Internal Revenue Service over leaked tax returns. On May 18, the U.S. Department of Justice announced the creation of a $1.776 billion Anti-Weaponization Fund to resolve the case, describing the settlement as “voluntary and nonpartisan.” The fund will operate until 2028, after which any unspent money reverts to the federal government.
Key Figures & Groups
- Michael Gianaris – State Senate Deputy Leader, co-sponsor.
- Alex Bores – Assembly member, co-sponsor and vocal critic of the settlement.
- Todd Blanche – Acting Attorney General who signed the settlement order and defended the fund’s purpose.
- Donald Trump – Plaintiff in the original IRS lawsuit whose settlement generated the fund.
- U.S. Department of Justice – Administrator of the fund and appointor of a five-member commission to determine eligibility.
Data & Statistics
- Anti-Weaponization Fund size: $1.776 billion.
- Underlying lawsuit settlement: $10 billion.
- Fund operation period: 2024-2028 (ends 2028).
- Proposed state tax rate: 100 percent on any payout to New York residents.
- Projected revenue destination: New York State General Fund.
Official Statements & Responses
Gianaris asserted that the legislation would ensure “no one in New York benefits from this wrongdoing,” emphasizing that the fund should not support individuals who have committed crimes. Bores framed the settlement as a “slush fund” that could be used to compensate participants in the January 6 insurrection. Acting Attorney General Blanche described the DOJ’s intent as “to make right the wrongs that were previously done while ensuring this never happens again,” and noted that victims of government weaponization may seek formal apologies alongside monetary relief.
Criticism & Opposition
Critics, led by Bores, argue that the settlement creates a mechanism to reward participants in the Capitol attack with taxpayer money. Bores contended that “Trump just created a $1.8 billion slush fund to pay off January 6 insurrectionists using your tax dollars.” The bill’s sponsors maintain that the 100 percent tax prevents any New Yorker from profiting from the alleged wrongdoing.
Conflicting Reports & Gaps
The DOJ has not excluded the possibility that individuals convicted of assaulting police during the January 6 attack could receive payments, and Vice President J.D. Vance has offered no contrary position. Additionally, the original lawsuit was dropped before a judge could review the settlement terms, leaving the legal oversight of the fund’s distribution unclear.
Verbatim Quotes
- “Trump just created a $1.8 billion slush fund to pay off January 6 insurrectionists using your tax dollars.” — Alex Bores, Assembly Member
- “no one in New York benefits from this wrongdoing,” — Michael Gianaris, State Senate Deputy Leader
- “to make right the wrongs that were previously done while ensuring this never happens again.” — Todd Blanche, Acting Attorney General
- “According to the department’s official announcement, victims of government weaponization can seek formal apologies alongside money.” — U.S. Department of Justice announcement
What’s Next: Legislative Process and Commission Appointment
The bill now proceeds to committee hearings in the New York Senate and Assembly. If passed, the state would enact the 100 percent tax and the DOJ would appoint a five-member commission to evaluate eligibility for the Anti-Weaponization Fund, with any approved payouts subject to the new state tax.
