California Governor Gavin Newsom recently said he’s considering holding back the state’s federal tax payments. This bold idea came after reports that the Trump administration might cut off federal money to California. Newsom is especially upset about possible funding cuts to California’s university system. He says it’s unfair for California to send billions in taxes to Washington, D.C., only to get less support in return.
This isn’t something governors usually say. It’s more of a political warning than a legal action plan. Still, the statement has gotten a lot of attention and raised big questions about how federal taxes work.
What Does It Mean to Be a “Donor State”?
California is known as a “donor state.” That means the state gives more money to the federal government in taxes than it receives back in federal programs and services. For example, in 2022, Californians paid about $692 billion in federal taxes. But the state only got around $609 billion back in the form of funding for things like transportation, education, and healthcare. That’s a difference of about $83 billion.
In simple terms, Californians are helping to pay for services in other states that get more than they give. This is a major reason why Newsom—and many other California leaders—are frustrated.
California Isn’t Alone: Other States Pay More Than They Get
California isn’t the only state in this situation. There are at least 11 states that pay more to the federal government than they receive in return. Some of these states include:
- New Jersey
- Massachusetts
- Washington
- New York
- Illinois
This pattern shows a divide in the country, where some states carry more of the financial load. Leaders in these donor states often argue that they should have more say in how federal funds are used.
The Trump Administration Fires Back
In response to Newsom’s comments, Trump administration officials pushed back hard. Treasury Secretary Scott Bessent called Newsom’s idea “criminal tax evasion” and said it would be illegal for California to withhold federal taxes. He argued that, instead of threatening not to pay taxes, California should lower its own state taxes to match the federal tax cuts passed under Trump.
Republican leaders have criticized Newsom for playing politics and say he should focus more on solving California’s own problems instead of starting fights with the federal government.
Can a State Really Refuse to Pay Federal Taxes?
The short answer is no, not in any realistic or legal way. The federal tax system is set up so that individuals and businesses pay taxes directly to the Internal Revenue Service (IRS). Governors don’t have the power to block those payments. Even if a state government tried to create a separate tax system, it would likely face serious legal challenges in court.
So, what’s Newsom really doing? Most experts say this is more of a political message than a plan. By threatening to stop federal tax payments, he’s trying to bring attention to how much money California sends to Washington—and how little it sometimes gets back.
Final Thoughts
Governor Newsom is using strong language to push back against what he sees as unfair treatment from the federal government. While it’s very unlikely California could or would stop sending federal taxes, the conversation has sparked debate about how tax dollars are used and whether states like California are getting their fair share in return.
