California Taxes

Newsom’s Federal Tax Boycott: Will Blue States Defy Trump?

Escalating tensions between California and the Trump administration have led to a potential conflict over tax funding. California Governor Newsom threatened to withhold the state’s substantial tax contributions to the federal government—approximately $83 billion more than it receives in return—in response to potential federal funding cuts to the state’s university system. Treasury Secretary Bessent countered, accusing Newsom of threatening criminal tax evasion and suggesting California adopt Trump-era tax cuts. This “donor state” dynamic highlights the significant financial disparity between states’ tax contributions and federal funding received.

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Newsom Considers Tax Withholding as Trump Threatens California

Newsom’s suggestion to withhold federal taxes from the federal government is a bold response to Trump’s perceived threats against California. The governor highlighted the significant disparity between the amount California contributes to the federal tax pool and the amount it receives in return, emphasizing a substantial imbalance of approximately $83 billion in 2022. This imbalance underscores California’s financial contribution to the nation, fueling the governor’s consideration of withholding these substantial funds.

This proposed action stems from a growing sentiment amongst Californians who feel their state disproportionately funds other parts of the country. The idea is not merely retaliatory; it reflects a long-standing frustration with the perceived unfairness of the current system.… Continue reading