United States Representative Jimmy Panetta joined Rep. Mike Thompson and other members of the House Ways and Means Committee to introduce legislation on May 20 that would prevent a sitting president from profiting from lawsuits against the United States government. The Stop Letting United States Heads Funnel Unauthorized Nontransparent Dollars Act of 2026, known as the SLUSH FUND Act, proposes a 100 percent tax on any payout received by a president from such lawsuits.
The bill comes in response to reports that President Trump settled a lawsuit against the Internal Revenue Service for $1.776 billion, with plans to make those funds available to January 6 rioters and other allies. Lawmakers say this measure is necessary to protect taxpayer dollars and ensure accountability for presidential actions involving public funds.
“As the war in Iran and harmful tariff policies continue to raise prices on food, fuel, fertilizer, and other goods, the President also wants to use taxpayer dollars to award his cronies and allies, including January 6 insurrectionists, through a $1.8 billion slush fund. This Administration’s senseless so-called ‘Anti-Weaponization Fund’ is yet another example of the President’s unacceptable and corrupt abuse of taxpayer funds for political gain,” said Rep. Panetta. “Our legislation would ensure any sitting president who sues the U.S. government faces an 100% tax on any payout that they receive from a trial or settlement so that innocent taxpayers don’t get stuck footing the bill.”
Ways and Means Subcommittee on Tax Ranking Member Thompson said: “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… 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 added: “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… 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.”
The SLUSH FUND Act would impose not only this excise tax but also an additional penalty of up to fifty percent for willful attempts at tax evasion related to these payments. The legislation includes requirements for information reporting both by recipients of payments from such funds as well as notification obligations by Treasury officials; failure could result in penalties up to $10,000 per violation.
Panetta is currently serving in Congress representing California’s nineteenth district after replacing Sam Farr in 2017; he was born in Washington D.C., graduated from University of California Davis with his BA in 1991 before earning his JD at Santa Clara University five years later according to Jimmy Panetta’s official website.
The bill takes effect May 20, with support from fifteen additional Democratic members of Ways and Means.
