Blue States Push 100% Tax on Anti-Weaponization Fund Payouts Amid Legal Uncertainty

Blue states including California and New York are coordinating to tax 100% of payouts from the federal government’s $1.8 billion Anti-Weaponization Fund—funded by a Trump IRS settlement—arguing it would deter use of the money. California and New York governors have signaled support, and Illinois and New Jersey are drafting similar bills to move quickly. But constitutional questions loom: such a levy could face challenges as a bill of attainder or be hard to enforce if payout recipients aren’t publicly identifiable, and deadlines in states like California complicate swift passage. Still, officials say the move aims to send a strong political message against the fund and Trump’s actions.