California Governor Gavin Newsom and U.S. Treasury Secretary Scott Bessent clash over state tax policy and federal funding, threatening to escalate into a major political and legal battle.
At a Glance
- Bessent accused Newsom of advocating criminal tax evasion.
- Newsom threatened to withhold $80 billion in federal taxes.
- Criticism emerged over deploying troops to manage protests in California.
- Bessent suggested Trump-like tax cuts as a better solution.
Newsom’s Threat and Bessent’s Warning
Treasury Secretary Scott Bessent accused Governor Gavin Newsom of “threatening to commit criminal tax evasion” following Newsom’s suggestion to withhold $80 billion in federal taxes. This proposal was a response to potential funding cuts from the Trump administration, aimed at sending a strong message to the federal government.
Bessent cautioned businesses and state officials against such actions, warning that unpaid federal taxes could result in personal liability. He criticized this approach as reckless and advocated for a shift towards adopting a tax framework akin to the Trump Tax Cuts, which he argued would lower tax burdens in the state.
A Multi-Layered Dispute
The dispute plays into a broader conflict between Newsom and the Trump administration, which has been marked by disagreements over troop deployments. Defense Secretary Pete Hegseth expressed support for using troops to manage anti-ICE protests in Los Angeles, but Newsom criticized such measures.
“Deranged = allowing your city to burn & law enforcement to be attacked. There is plenty of room for peaceful protest, but ZERO tolerance for attacking federal agents who are doing their job. The National Guard, and Marines if need be, stand with ICE.” – Hegseth.
Newsom argued that Californians contribute more in federal taxes than they receive back, justifying his stance to withhold payments to leverage influence over federal policies.
Broader Implications
This tax policy dispute links to other state-federal rifts, including the allowance of transgender athletes in sports. Newsom’s tax threat also served as a direct retort to Trump’s criticism of California’s policies on biological males competing in girls’ sports and a federal probe into potential Title IX violations.
“Californians pay the bills for the federal government,” – Gavin Newsom.
Amid these tensions, gubernatorial candidate Steve Hilton has announced efforts to challenge California laws that protect transgender athletes, further linking this issue to the ongoing state-vs-federal debates.
