{"id":277,"date":"2025-06-17T23:27:14","date_gmt":"2025-06-17T23:27:14","guid":{"rendered":"https:\/\/www.bourbonnaistax.com\/blog\/?p=277"},"modified":"2025-06-17T23:27:14","modified_gmt":"2025-06-17T23:27:14","slug":"california-dreamin","status":"publish","type":"post","link":"https:\/\/www.bourbonnaistax.com\/blog\/california-dreamin\/","title":{"rendered":"California Dreamin\u2019"},"content":{"rendered":"
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California Governor Gavin Newsom has been playing \u201cDavid versus Goliath\u201d with President Donald Trump, especially as Trump has ordered troops into Los Angeles to quell protests against his immigration raids. Now Newsom has floated a wild idea: what if California stopped sending money to the IRS?<\/p>\n\n\n\n

Yes, you read that right. The head of the fifth-largest economy in the world \u2014 home of tech bros, movie stars, and $12 oat milk lattes \u2014 is making noises about withholding federal tax revenue. Why? Because he\u2019s mad. Specifically, he\u2019s mad at Trump for what he sees as unfair and unconstitutional assaults on his state\u2019s rights. But before you start imagining Sacramento hiring a goon to block wire transfers to Washington, let\u2019s talk about what this really means. Spoiler alert: not much.<\/p>\n\n\n\n

Here\u2019s the core issue. California is what tax nerds call a \u201cdonor state.\u201d That means Californians pay more to the federal government than they get back in benefits. In 2022, the Golden State sent Uncle Sam about $472 billion in federal taxes and got only around $400 billion back in spending.<\/p>\n\n\n\n

This isn\u2019t new. Donor states have grumbled about this imbalance for decades. New Jersey and New York have hosted their own pity parties. But California is the one now threatening to pull the plug. But here\u2019s the kicker: there\u2019s no<\/em> actual legal mechanism for California to withhold federal tax dollars. None. Zip. Nada.<\/p>\n\n\n\n

Federal income tax is collected directly from individuals and businesses by the IRS. It\u2019s not like Sacramento gets a big pile of checks every month, then decides whether to forward them along with a Post-it that says, \u201cFor roads and vibes.\u201d The IRS has already set up direct deposits with your paycheck. The federal tap doesn\u2019t go through state plumbing.<\/p>\n\n\n\n

Even if California wanted<\/em> to intercept federal tax payments, doing so would be about as successful as trying to skim quarters from a vending machine by shaking it. Fun to imagine. Totally illegal. Also guaranteed to make the vending machine cranky.<\/p>\n\n\n\n

If California did<\/em> try something bold, like refusing to cooperate with IRS enforcement or blocking bank transfers, it would surely trigger a swift federal response. Think lawsuits, withholding of federal funds, and an avalanche of paperwork that would make the DMV look like a day spa.<\/p>\n\n\n\n

Now, from a planning standpoint, this moment is interesting because it reminds us just how complicated our tax system really is. We think of it as this big, monolithic machine. But it\u2019s actually more like a \u201cthrouple\u201d marriage between federal, state, and local governments. And like any messy relationship, there are power struggles, money fights, and the occasional dramatic outburst on social media.<\/p>\n\n\n\n

It also shines a spotlight on an uncomfortable truth. Where you live really does affect what you pay and what you get. Californians pay high state taxes and<\/em> send more to Washington than they get back. Meanwhile, residents of lower-income, often lower-tax states get more bang for their federal tax buck. Paying tax in California can feel like going out to dinner after your nephew\u2019s graduation, ordering the Caesar salad, and winding up paying for your cousin\u2019s lobster and cocktails.<\/p>\n\n\n\n

So what\u2019s the takeaway? Don\u2019t count on your state to block your tax bill. If you live in California, your withholding still ships directly to Washington, with or without Newsom\u2019s moral protest. If you’re feeling cranky about what you get in return, join the club. But don\u2019t skip filing, unless you enjoy penalties, interest, and IRS nastygrams.<\/p>\n\n\n\n

In the meantime, keep your eyes open to proactive planning. Because while California may not be able to stop the flow of money to D.C., we <\/em>can help you stop overpaying your share of it!<\/p>\n","protected":false},"excerpt":{"rendered":"

California Governor Gavin Newsom has been playing \u201cDavid versus Goliath\u201d with President Donald Trump, especially as Trump has ordered troops into Los Angeles to quell protests against his immigration raids. Now Newsom has floated a wild idea: what if California stopped sending money to the IRS?<\/p>\n

Yes, you read that right. The head of the fifth-largest economy in the world \u2014 home of tech bros, movie stars, and $12 oat milk lattes \u2014 is making noises about withholding federal tax revenue. <\/p>\n","protected":false},"author":2,"featured_media":278,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"","_genesis_layout":"","footnotes":""},"categories":[3],"tags":[171,173,172,174,50,175,178,176,4,11,9,6,95,80,64,177],"class_list":{"0":"post-277","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-taxes","8":"tag-californiataxes","9":"tag-donorstates","10":"tag-federalwithholding","11":"tag-gavinnewsom","12":"tag-irs","13":"tag-overpayingtaxes","14":"tag-sacramentopolitics","15":"tag-statevsfederal","16":"tag-tax","17":"tag-tax-savings","18":"tag-tax-strategy","19":"tag-taxes","20":"tag-taxnews","21":"tag-taxplanning","22":"tag-taxpolicy","23":"tag-taxreform","24":"entry"},"_links":{"self":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/277","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/comments?post=277"}],"version-history":[{"count":1,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/277\/revisions"}],"predecessor-version":[{"id":279,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/posts\/277\/revisions\/279"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/media\/278"}],"wp:attachment":[{"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/media?parent=277"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/categories?post=277"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bourbonnaistax.com\/blog\/wp-json\/wp\/v2\/tags?post=277"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}