U.S. Treasury Secretary Scott Bessent cautioned California Governor Gavin Newsom against his threats to withhold tax payments to the federal government, labeling such actions as criminal tax evasion. This warning arises amidst expected federal funding cuts to California under the Trump administration, especially affecting the state university system. Newsom had earlier expressed that California contributes significantly more tax revenue than it receives in federal funding, setting the stage for conflict with federal authorities, who criticized the state's policies. Bessent urged Newsom to consider tax cuts instead of risk tax evasion lawsuits.
Scott Bessent warned California Governor Gavin Newsom that withholding tax payments would amount to criminal tax evasion, urging a shift to a tax-cutting plan.
Bessent criticized Newsom's threat as reckless, emphasizing that California businesses understand the consequences of failing to pay taxes owed to the Treasury.
Newsom stated that Californians pay significantly more taxes to the federal government than they receive, suggesting it might be time to cut payments.
White House spokesperson Kush Desai condemned California's policies, indicating no taxpayer should fund what he described as the country's demise.
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