Treasury Secretary Scott Betting accused California Governor Gavin Newsom of “threatening to commit criminal tax evasion” after the Democratic leader suggested in a social media post that the state should consider withholding federal tax payments in response to possible funding cuts from the Trump administration.
Newsweek has reached out to Newsom’s press office for comment via email on Sunday.
Why It Matters
The Trump administration has threatened to withhold federal funding from various state programs and institutions, including research and education programs. Last week, CNN reported that the administration is considering cutting grant funding to the University of California and California State University systems.
In late-May, President Donald Trump threatened to pull “large scale federal funding” from the Golden State unless it bars transgender athletes from competing in girls’ sports.
Bessent’s remarks come amid ongoing tensions between federal, state, and local authorities as protests continue in Los Angeles, which were sparked following immigration raids during which police followed the Trump administration’s directives to arrest people. Some protesters have thrown rocks at officers, with one allegedly throwing a Molotov cocktail, and burning items in the streets. Agents have used tear gas on the crowds.
The clashes highlight deepening conflicts between sanctuary jurisdictions and federal immigration policy, as Trump has implemented sweeping changes through executive orders and deployed the National Guard against local leaders wishes.
Treasury Secretary Scott Bessent testifies on Capitol Hill in Washington, D.C., on May 7. Inset: California Governor Gavin Newsom speaks in West Hollywood, California, on March 26.
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What To Know
On Friday, Newsom shared a screenshot of a CNN article on X, formerly Twitterabout the Trump administration’s potential move to cut federal funding to the state, writing, “Californians pay the bills for the federal government. We pay over $80 BILLION more in taxes than we get back. Maybe it’s time to cut that off.”
His post followed a CNN report that the Trump administration is targeting California’s public university system over alleged antisemitism on campus. The administration has already taken similar action against Harvard University.
California is the most populous state in the country with over 39 million people. It leads all the states in federal tax collection, with the Internal Revenue Service (IRS) reporting that California contributed around $806 billion to total IRS collections in the 2024 fiscal year, which is about 15 percent of the national total.
A recent analysis by the Rockefeller Institute of Government found the state contributed $83.1 billion more in federal taxes in 2022 than it received back.
In response to the governor, Bessent, who oversees the IRS, wrote in an X post on Sunday: “Governor @GavinNewsom is threatening to commit criminal tax evasion. His plan: defraud the American taxpayer and leave California residents on the hook for unpaid federal taxes.”
Governor @Gavinnewsom is threatening to commit criminal tax evasion.
His plan: defraud the American taxpayer and leave California residents on the hook for unpaid federal taxes. (1/3) https://t.co/fn7ch7WwoC
— Treasury Secretary Scott Bessent (@SecScottBessent) June 8, 2025
In a follow up post, he wrote: “I am certain most California businesses know that failing to pay taxes owed to the Treasury constitutes tax evasion and have no intention of following the dangerous path Governor @GavinNewsom is threatening.”
In a third post, the treasury secretary called the governor’s comments “extremely reckless.”
Federal law defines a willful attempt to evade or defeat federal taxes as a felony under United States law.
The public clash comes as Newsom is sparring with Trump and Defense Secretary Pete Hegseth over deployment of the National Guard, and potentially active-military Marines, following protests in California sparked over federal immigration enforcement operations.
Hegseth wrote in a Saturday evening post on X that in addition to mobilizing guards, nearby Marines may also be called upon, writing, “And, if violence continues, active-duty Marines at Camp Pendleton will also be mobilized — they are on high alert.”
What People Are Saying
White House spokesperson Kush Desai told CNN in a Friday statement: “No taxpayer should be forced to fund the demise of our country,” in regard to certain California policies related to energy and immigration.
“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.”
Robert Rivas, speaker of the California State Assembly, wrote in a BlueSky post about the CNN article on Friday: “This is unconstitutional and vindictive. We’re the nation’s economic engine and the largest donor state, and deserve our fair share. I’ll use every legal and constitutional tool available to defend CA — we must look at every option, including withholding federal taxes.”
What Happens Next?
The tension between the Trump administration and Newsom don’t show signs of easing.
