California Governor Gavin Newsom has raised the stakes in his ongoing fight with President Donald Trump. On Friday, Newsom threatened to stop sending federal tax payments from California to the federal government. His statement is seen as a bold escalation in the battle between the Trump administration and the nation’s largest state.
What Newsom is Proposing
“Californians pay the bills for the federal government,” Newsom posted on X, formerly known as Twitter. “We pay over $80 BILLION more in taxes than we get back. Maybe it’s time to cut that off, @realDonaldTrump.” He was referring to a recent analysis from the Rockefeller Institute that California contributed about $83 billion more in federal taxes in 2022 than it received back from Washington.
Assembly Speaker Robert Rivas also chimed in on BlueSky, saying, “I’ll use every legal and constitutional tool available to defend CA. We must look at every option, including withholding federal taxes.” This suggests that some California lawmakers see withholding tax payments as a real possibility.
Why Newsom is Making This Threat
Newsom’s threat came after reports from CNN and other outlets said that President Trump is considering a “full termination” of federal grant funding for California’s universities. The Trump administration has already moved to block $4 billion in funding for the state’s High-Speed Rail project. The president also threatened to cut money for California after a transgender athlete placed first in two girls’ high school track and field championships. These are just the latest examples of federal actions targeting California.
Newsom’s Department of Finance spokesperson, H.D. Palmer, explained that California receives about $170 billion in federal grants across different programs, including $100.9 billion for medical assistance. Palmer said that as of Friday afternoon, they did not have clear information on what federal funding might actually be cut. “The only thing that has come from Washington about this so far is a lot of unattributed quotes and statements of intent,” Palmer said in an interview with KCRA 3. “But no numbers, no spreadsheets, nothing real that you could actually analyze. So at this point, it’s a lot of rhetoric but not a lot to back it up.”
What the Trump Administration is Saying
White House spokesperson Kush Desai responded to Newsom’s threat by calling California’s policies “lunatic.” In a statement, Desai said, “The Trump administration is committed to ending this nightmare and restoring the California Dream.” He also said that no final decisions had been made about funding cuts and that any talk of this should be seen as “pure speculation.”
Desai’s comments show that the Trump administration sees California’s approach to issues like immigration, energy, and social policies as going against federal policies. In recent years, the administration has used funding threats to try to bring California in line with national policies.
What Could Happen with the Threat to Withhold Taxes
Legally, it is unclear whether a state can block federal tax payments. Usually, taxes are collected directly by the federal government from individuals and businesses. Experts have noted that such a move would likely face challenges in court. Some have compared it to the “nullification” efforts by Southern states before the Civil War, when states tried to block federal actions they disagreed with.
Critics of Newsom’s threat warn that this idea could backfire by sparking a tax revolt against California’s already high taxes. California’s tax burden is among the highest in the nation, and some analysts think this kind of talk could create a backlash from taxpayers.
Supporters of Newsom argue that the governor is highlighting an important imbalance. H.D. Palmer said that the governor was making the point that California’s contribution to the federal government is huge and that this should not be ignored. “Because of our strength, because of our tech-based economy, we contribute mightily to the federal government and the nation’s revenue source,” Palmer said. “What the governor I think was suggesting in the tweet is that [the president] may suggest and talk a tough game about taking away dollars, but if you really want to go down this road, let’s have a serious discussion about how much California contributes to the national economy and to the national Treasury in terms of the amount of tax dollars that Californians pay to the federal government.”
A Long History of Tension
The fight between California and the Trump administration is not new. California has frequently sued the federal government, challenging Trump’s policies on everything from immigration to environmental protection. Newsom has also blamed Trump’s trade policies for hurting California’s economy. In early May, Newsom said tariffs had ripped $16 billion from the state’s budget.
Palmer said that these threats from the Trump administration are just another round in a long-standing conflict. “I think this is just another inning in a very long game that has been going on since the beginning of the year,” he said.
For now, the threat to withhold federal taxes is just a suggestion. No formal plan has been announced, and experts doubt it would be legal. Still, the fact that Newsom and other California leaders are even talking about it shows just how tense the relationship between California and the federal government has become.
