Trump tantrum: After world's fourth-largest economy California, 10 other states can withhold federal taxes
Tensions have escalated between California and the Trump administration over federal taxes. Governor Newsom threatened to withhold California's tax contributions after the administration proposed cutting funding to the state's university system.
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Why Is California Threatening to "Cut Off" Federal Taxes?
What Did the Trump Administration Say?
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What Are the Donor States in the US?
California ($83 billion gap)
New Jersey ($28.9 billion)
Massachusetts ($27 billion)
Washington state ($17.8 billion)
New York ($7.1 billion)
Minnesota ($4.5 billion)
Colorado ($2.9 billion)
Illinois ($2.6 billion)
New Hampshire ($2.4 billion)
Connecticut ($1.9 billion)
Utah ($709 million)
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Tensions between the world's fourth-largest economy, California, and the US president Donald Trump's administration have increased over taxes, as per a report.The conflict arose after the Trump administration said that it planned to cut funding for California's university system, the largest higher education system in the nation, with about 12% of all US enrolled students, reported CBS News.Governor Gavin Newsom responded by highlighting in a social media post on X that the state provides about $80 billion more in taxes to the federal government than it receives in return, reported the CBS News. He then went on to threaten and said, "Maybe it's time to cut that off, @realDonaldTrump," as quoted by the CBS News report.Treasury Secretary Scott Bessent reacted to Newsom's post by saying that the governor "is threatening to commit criminal tax evasion ," adding, "His plan: defraud the American taxpayer and leave California residents on the hook for unpaid federal taxes," quoted CBS News.Bessent also said, "Instead of committing criminal tax evasion, Governor Newsom should consider a tax plan for California that follows the Trump Tax Cuts model and reduces the onerous state tax burden to allow families to keep more of their hard-earned money," as quoted by the CBS News report.As per tax data, California is the largest donor state in the United States, as it provides more in taxes to the federal government than it receives in return, reported CBS News.Data compiled by the California Budget and Policy Center, found that the state's residents and businesses provided $692 billion in tax revenue to the federal government in 2022, while California had received $609 billion in federal funding, leaving a gap of about $83 billion, as per the report.Rockefeller Institute of Government has revealed that a total of 11 US states contribute more in taxes to the federal government than they get back, as per CBS News. Here is the list complied by CBS News:It's a state that sends more to the federal government in taxes than it receives in federal spending.He called it 'criminal tax evasion' and accused Newsom of trying to defraud the country.
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