Latest news with #CaliforniaBudgetandPolicyCenter
Yahoo
7 hours ago
- Business
- Yahoo
California Gov. Gavin Newsom is floating a federal tax boycott
As tensions escalate between California and the Trump administration over immigration, another potential battlefront is emerging over taxes. The spat began with reports that the Trump administration is considering cutting funding for California's university system, the largest higher education system in the nation with about 12% of all U.S. enrolled students. In response, Gov. Gavin Newsom wrote Friday afternoon in a social media post that California provides about $80 billion more in taxes to the federal government than it receives in return. "Maybe it's time to cut that off, @realDonaldTrump," Newsom said. What is a donor state? A donor state is one that provides more in taxes to the federal government than they receive in return. The largest one, by far, is California, according to tax data. In 2022, California's residents and businesses provided $692 billion in tax revenue to the federal government. In return, the state received $609 billion in federal funding, leaving a gap of about $83 billion, according to the California Budget and Policy Center, a nonpartisan think tank. See which states are the biggest donors California's gap is so large partly due to the large number of high-income residents in the state, who pay a larger share of their income toward federal taxes than lower-income workers, the California Budget and Policy Center says. !function(){"use strict"; 0!== e= t in r,i=0;r=e[i];i++)if( d= Overall, 11 U.S. states contribute more in taxes to the federal government than they get back, according to the Rockefeller Institute of Government: 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)Colorada ($2.9 billion)Illinois ($2.6 billion)New Hampshire ($2.4 billion)Connecticut ($1.9 billion)Utah ($709 million) Other states receive more in funding than they provide to the federal government, according to the tax data. The imbalance stems from a mix of reasons, ranging from some states having a larger share of residents on federal aid programs, such as Medicaid, to a larger number of federal facilities, such as military bases, compared with other states, according to the California Budget and Policy Center. What has the Trump administration said? In response to Newsom's post about boycotting federal tax payments, Treasury Secretary Scott Bessent warned in a Sunday social media post that the governor "is threatening to commit criminal tax evasion." "His plan: defraud the American taxpayer and leave California residents on the hook for unpaid federal taxes," Bessent wrote. Bessent added, "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." Kristi Noem says "we are not going to let a repeat of 2020 happen" amid L.A. crackdown Magic in the dark: The fantastical worlds of Lightwire Theater Trump blasts Newsom as "grossly incompetent" as tensions rise over L.A. protests
CNBC
27-05-2025
- Politics
- CNBC
Trump threatens to withhold California's federal funding over transgender athlete
President Donald Trump on Tuesday threatened to strip "large scale federal funding" from California if the state goes against his executive order banning transgender athletes from participating in women's sports. That funding could be withheld "permanently" if California continues to flout the Feb. 5 order, Trump warned on Truth Social. The president's post complained that a trans athlete who qualified to compete against women in an upcoming competition is "practically unbeatable." He wrote that he will order "local authorities, if necessary, to not allow the transitioned person to compete in the State Finals." Trump added that he will speak with California Gov. Gavin Newsom, a Democrat, later Tuesday "to find out which way he wants to go" on the issue. Trump did not name the athlete whose participation in women's sports drew his ire. AB Hernandez, a California high school student and transgender athlete competing in girls track and field, has recently received media attention. Trump's threat to shut off federal funding could be significant for California, the world's fourth-largest economy. Over one-third of the state's budget comes from the federal government, according to the California Budget and Policy Center. The state's 2025-2026 budget includes more than $170 billion in federal funds. The threat also carries weight in light of Trump's increasing willingness to cancel billions of dollars in federal funds to universities, cities and other entities whose whose conduct he opposes. Earlier Tuesday, Trump moved to cancel all remaining federal government contracts with Harvard University — reportedly totaling roughly $100 million — in the administration's latest salvo against the elite institution. Trump has previously threatened to withhold federal funds from Maine over the state's compliance with Trump's executive order barring transgender women and girls from participating in female sports. Newsom, widely seen as a contender for the 2028 Democratic presidential nomination, has been a vocal critic of a number of Trump policies, including on tariffs and immigration. He downplayed the debate over trans athletes in April, saying the issue has been "weaponized by the right to be 10x, 100x bigger than it is." But he also suggested in March that trans athletes participating in girls' and women's sports was "deeply unfair," separating himself from many of his fellow Democrats. "I think it's an issue of fairness. I completely agree with you on that," Newsom told conservative influencer Charlie Kirk on his podcast. Newsom's office did not immediately provide a comment in response to Trump's post.
