Rep. Mike Thompson, Ranking Member of the House Ways and Means Subcommittee on Tax, announced on May 19 legislation that would impose a 100 percent tax on any settlement funds from lawsuits initiated by a sitting president against the United States government. The proposed SLUSH FUND Act targets what lawmakers describe as an unethical $1.776 billion fund intended for January 6th rioters and other supporters of former President Donald Trump.
The announcement comes in response to reports that President Trump settled a lawsuit against the Internal Revenue Service, resulting in the creation of a large fund reportedly earmarked for individuals involved in the January 6 attack on the U.S. Capitol. Lawmakers say this measure is necessary to prevent taxpayer dollars from being used to reward those who participated in or supported efforts to overturn democratic elections.
“This president continues to use the Office of the Presidency for personal gain, including by suing the federal government to line the pockets of January 6th insurrectionists who attacked law enforcement and tried to overturn our democratic election. That’s unacceptable,” said Ways and Means Subcommittee on Tax Ranking Member Mike Thompson. “My legislation ensures if a sitting president sues our government while in office, they get taxed 100 percent on any money paid through a trial or settlement.”
Ways and Means Committee Ranking Member Richard E. Neal also commented: “Donald Trump has turned the presidency into a personal profit center using taxpayer dollars to reward the same extremists who attacked our democracy on January 6th, and enrich his family empire, all while Republicans look the other way. If the President wants to run a corrupt slush fund for insurrectionists and political cronies, the American people shouldn’t be forced to bankroll it. That’s why I’m grateful to Tax Subcommittee Ranking Member Mike Thompson for stepping in and leading legislation that makes clear: no president is above the law, and no taxpayer should have to subsidize this kind of brazen self-dealing.”
The Stop Letting United States Heads Funnel Unauthorized Nontransparent Dollars Act of 2026 (SLUSH FUND Act) would impose not only an excise tax but also an additional penalty of up to fifty percent for attempts at tax evasion related to such settlements. The bill requires reporting payments both to recipients and federal authorities with public disclosure requirements; failure carries financial penalties.
Sixteen Democratic members of Congress are co-sponsoring Thompson’s bill. The legislation is set to take effect May 20.
