California Gov. Gavin Newsom is threatening to stop paying billions of dollars in taxes to the federal government. The threat comes as President Donald Trump reportedly prepares to cancel federal funds for the Golden State.
“Californians pay the bills for the federal government. We pay over $80 billion more in taxes than we get back,” Newsom wrote in a post on X. “Maybe it’s time to cut that off, @realDonaldTrump.”
Trump administration targets California universities
The governor’s threat follows a CNN report stating the Trump administration is preparing to cancel a significant portion of federal funding allocated to California. Sources told CNN the administration is specifically considering a complete termination of federal grant funding for both the University of California and California State University systems.
The sources said the administration is accusing some California universities of not doing enough to combat antisemitism and may penalize them, just as it has already done with Harvard and Columbia University.
History of conflict between Trump and Newsom
Trump and Newsom have been at odds for years. Just last month, the Trump administration threatened to withdraw federal funding from California in response to a transgender athlete winning the girls’ long jump and triple jump events at the California Interscholastic Federation Southern Section Masters Meet.
In February, Trump signed an executive order titled “Keeping Men Out of Women’s Sports,” which states, “It is the policy of the United States to rescind all funds from educational programs that deprive women and girls of fair athletic opportunities.”
California’s economic power and tax burden
Californians pay more in federal taxes than the state receives in federal spending, according to Axios. Only 13 states have this kind of “net contributor” status. Most other states receive more federal money than they pay in.
As the fourth-largest economy in the world in terms of gross domestic product, if California were its own country, it would have a GDP larger than most nations. If the state were to withhold federal tax payments, it could disrupt the national economy or federal operations. However, businesses remit their federal tax burdens directly to the federal government.
White House Deputy Press Secretary Kush Desai responded to Newsom’s threats in a statement to CNN. She said Trump hasn’t made a final decision on any funding cuts to the state.
“No taxpayer should be forced to fund the demise of our country,” Desai said. “No final decisions, however, on any potential future action by the administration have been made, and any discussion suggesting otherwise should be considered pure speculation.”
