Skipping Federal Taxes – Legal or LUNACY?

Treasury Secretary Scott Bessent warns California Governor Gavin Newsom that threatening to withhold federal tax payments constitutes criminal tax evasion, escalating tensions between the Trump administration and the Golden State.

At a Glance

  • Treasury Secretary Bessent accused Governor Newsom of “threatening to commit criminal tax evasion” after Newsom suggested California might stop paying federal taxes
  • Newsom threatened to withhold over $80 billion in federal taxes in response to potential funding cuts and Trump’s criticism of transgender athlete policies
  • Bessent warned that failing to pay federal taxes could lead to personal liability for state officials
  • The clash is part of broader tensions including disagreements over troop deployments to control anti-ICE protests in Los Angeles
  • The Department of Justice has launched a federal probe into California for potential Title IX violations related to transgender athletes in girls’ sports

Tax Evasion Warning Issued to Newsom

Treasury Secretary Scott Bessent has publicly condemned California Governor Gavin Newsom for what he describes as “threatening to commit criminal tax evasion.” The confrontation stems from Newsom’s suggestion that California might withhold over $80 billion in federal tax payments in response to potential funding cuts by the Trump administration. Bessent’s stern rebuke highlights the legal ramifications of such actions, warning that failure to comply with federal tax obligations constitutes tax evasion and could result in serious consequences for state officials.

“Governor Gavin Newsom is threatening to commit criminal tax evasion”, said Treasury Secretary Scott Bessent 

The Treasury Secretary’s comments came after Newsom argued that “Californians pay the bills for the federal government” and suggested cutting off payments if federal funding to the state is reduced. Bessent characterized Newsom’s threats as both dangerous and reckless, cautioning California businesses against following the governor’s lead. The Treasury Secretary also recommended that California consider adopting tax policies similar to the Trump Tax Cuts to alleviate the state’s tax burden rather than pursuing what he described as unlawful tax avoidance.

Transgender Athletes at Center of Funding Dispute

The tax payment controversy is directly connected to the ongoing debate over transgender athletes in school sports. President Trump criticized California for allowing a biological male to compete and win in girls’ state finals, vowing to impose financial penalties on the state. The California Interscholastic Federation has amended its rules to accommodate transgender athletes, which has affected competition outcomes and drawn federal scrutiny. The Department of Justice has launched an investigation into California for potential Title IX violations related to transgender athletes participating in girls’ sports.

“A Biological Male competed in California Girls State Finals, WINNING BIG, despite the fact that they were warned by me not to do so,”, said President Donald Trump.

California gubernatorial candidate Steve Hilton has made overturning laws protecting transgender competitors in sports a central campaign issue. Despite multiple requests for comment regarding the tax evasion allegations, Governor Newsom’s office has not provided a response, further intensifying speculation about the state’s intended course of action. Bessent’s warning specifically addressed the legal risks for state officials who might be held personally liable for encouraging tax non-compliance.

National Guard and Troop Deployment Tensions

The tax dispute represents just one facet of the escalating conflict between California’s leadership and the Trump administration. Another point of contention involves the potential deployment of military personnel to address anti-ICE protests in Los Angeles. Newsom has strongly criticized Defense Secretary Pete Hegseth for suggesting that active-duty Marines could be deployed to control these demonstrations, characterizing the move as federal overreach into state affairs.

Secretary Hegseth has defended the potential deployment, emphasizing that while peaceful protests are permitted, there will be “zero tolerance for attacking federal agents who are doing their job.” This stance has further inflamed tensions between California’s state government and federal authorities. The dispute highlights fundamental disagreements about federal authority, state sovereignty, and the enforcement of immigration policies, creating what appears to be an increasingly adversarial relationship between California and the Trump administration.

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