California Governor Gavin Newsom announced Wednesday that he will impose a 100 percent tax on any payments distributed from a federal fund created to compensate what the Trump administration calls victims of weaponization and lawfare. The move directly targets a 1.776 billion dollar settlement the Department of Justice announced in May.
The fund emerged from a legal settlement between Trump and the Internal Revenue Service following a lawsuit by the president over his leaked tax returns. Specifics on who qualifies as a victim under the fund's criteria remain undefined.
Newsom called the program a boondoggle in a social media post Wednesday, warning that the money could flow to Trump allies, particularly individuals arrested during the January 6, 2021 Capitol riot. The Trump administration has characterized those rioters as patriots and granted pardons to numerous defendants connected to the attack.
"People who assault cops and overthrow democracy don't deserve a taxpayer-funded payday," Newsom wrote on X.
The Justice Department has assigned five attorneys appointed by the acting US attorney general to oversee fund distributions. The money will be pulled from an account typically reserved for federal court judgments. Claims must be filed by December 1, 2028, and any unclaimed balance will be returned to the federal government. The department plans to issue quarterly reports on disbursements.
Acting US Attorney General Todd Blanche defended the fund as a mechanism "to make right the wrongs that were previously done." A Justice Department spokesperson did not respond to questions about how the agency would address Newsom's proposed tax on recipients.
The confrontation reflects deeper tensions between Newsom and Trump that have intensified since the president took office. The two have clashed publicly over border enforcement, healthcare policy, and election procedures in California, trading criticism across media and social platforms repeatedly.
Author James Rodriguez: "Newsom's tax gambit is smart politics but faces long legal odds, and the real question is whether California can actually collect from residents who receive federal checks."
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