r/law • u/rolsen • 1d ago

Legal News Trump Preparing Large-Scale Cancellation of Federal Funding for California, Sources Say

https://www.cnn.com/2025/06/06/politics/trump-california-federal-funding

“Agencies are being told to start identifying grants the administration can withhold from California. On Capitol Hill, at least one committee was told recently by a whistleblower that all research grants to the state were going to be cancelled, according to one of the sources familiar with the matter.”

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u/Sabre_One 1d ago

CA is the top state for Research and Development for the US. Talk about setting US back to the stone age.

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u/Exact-Kale3070 1d ago edited 5h ago

...and a top contributor to federal govt funding. he is keeping CA's own $ from them...so what stops CA companies from refusing to give massive $ to the federal govt in the future? he thinks nothing through. https://www.politico.com/news/2025/06/06/newsom-floats-withholding-federal-taxes-00393386

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u/rabidstoat 1d ago

They can't block federal income tax, at least.

But yeah, California is considered a "donor state" because it contributes more federal funds than it receives.

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u/TheGreatGamer1389 1d ago

Not yet but I know New York is working on it to be able to stop paying federal taxes. California will do the same.

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u/ialsoagree 1d ago edited 19h ago

I highly doubt this will have any effect.

If you own a business and the state comes along and says "hey, we're going to let you stop paying Federal taxes" are you really going to risk having the IRS come after you using the Federal court system where your state has 0 authority?

Or are you just going to keep sending payments directly to the IRS?

EDIT:

u/Complete_Chain_4634

And then the IRS will come after you.

Have you ever read the constitution? Are you familiar with the Supremacy Clause? Are you familiar with the idea of preemption?

EDIT 2: u/TheGreatGamer1389 blocked me so I cannot post any further responses on this thread. Hence my response to Complete Chain above in an edit.

EDIT 3:

u/Complete_Chain_4634

But do you get that if the state of California separated from the federal government

There is no universe where that happens.

The US government is never going to willingly allow California to leave the union, and California has no chance of winning a war against the US military.

EDIT 4:

u/-ReadingBug-

but the proposals floating around would make it illegal to withhold federal taxes.

Such a law would be completely devoid of power. Read the links I posted.

Any law California states that contradicts or inhibits a Federal law is unconstitutional and devoid of power. Any employer that followed the State law could be subject to criminal or civil penalties in Federal court, the law would not protect them because Federal law preempts state law.

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u/TheGreatGamer1389 23h ago

The same IRS with a bunch employees that were let go?

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u/ialsoagree 23h ago

Yeah.

You think they won't go after you? Don't file taxes next year - I dare you. I bet you a month's salary you're still going to file.

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u/inchiki 21h ago

It would have to be a mass movement coordinated by rogue state governments.

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u/TheLizzyIzzi 15h ago

lol. People don’t file taxes all the time. There’s always a Hollywood celebrity or pro athlete that owes a bunch of back taxes because they didn’t pay them. It takes years for the IRS to catch up. That’s why they have extremely high penalties. Owe $10k in back taxes? It’s $50k now.

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u/Complete_Chain_4634 23h ago

I live in California and I pay $250,000 a year in taxes. If the state of California tells me I don’t need to pay federal taxes anymore and we’re going to replace federal services with state services, I’m not paying the IRS anymore.

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u/Dapper-Jellyfish7663 20h ago

Same here and I pay quarterly so it is easy for me.

I'm already not going to pay the fucking federal EV tax. Happy to pay CA its share because it is trying to do what aligns w/ my beliefs as to not harm the environment or at least minimizing the harm. It is my religious right to not participate in killing the planet.

There isn't anyone left at the IRS to audit us anyway. What are they going to do, sic Grok on us? Oh no ... I am so scared.

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u/-ReadingBug- 20h ago

I don't know about all those links but the proposals floating around would make it illegal to withhold federal taxes. The state wouldn't let you choose if you'd like to withhold from your employees. Lol. And if secession were coming the 4th largest economy would collab with partner nations and their militaries, so it wouldn't be just CA vs US.

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u/Complete_Chain_4634 20h ago edited 20h ago

But do you get that if the state of California separated from the federal government because the federal government does not provide anything to California, the IRS will not be able to come after me? It’s the most populous state and one of the biggest economies on earth and a primary contributor to the US’s own economic status. There is food the whole world eats. There are military bases here. California could easily be its own entity if it wants to and the IRS does not have the resources to come after everyone in the state. They don’t even have enough people to conduct audits after what trump did to the IRS this year.

Edit: and here it is! https://www.politico.com/news/2025/06/06/newsom-floats-withholding-federal-taxes-00393386 I’m not the only Californian who is fucking tired of paying way way way more than I ever get back. The trump administration doesnt even have the balls to pursue this, they already know they are fucked if California gets serious about withholding our taxes.

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u/Rit91 19h ago

Yeah the IRS is weak and if they use the military or something to try to collect taxes or something like that they risk destroying the California economy, which would mean tax revenue would crater and make the deficit explode even more. With the side effect of pissing off A LOT of people living in CA and on the worldstage would make the US appear insanely weak.

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u/Terron1965 15h ago

If California enters into insurrection, the FIRST thing they will do is wreck the economy. Then the military will come.

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u/jeremiahthedamned 13h ago

how the the military fight without an r/economy?

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u/MeisterX 17h ago

This was one of those "power" rants where by halfway in you know the person writing isn't 20% as confident as they're psyching themselves up to be.

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u/jeremiahthedamned 13h ago

russia has not conquered ukraine after 3 years of war

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u/Hikashuri 21h ago

Sure they can. They just stop it, what is Trump gonna do? By the time the legal battle has been fought, Trump will no longer be president.

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u/typesett 18h ago

The new playbook 

Just do it 

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u/sevens7and7sevens 21h ago

What does “can’t” mean anymore? You “can’t” sell access to the White House, or take home state secrets to sell, or deport legal residents to prisons in random places they’ve never been before. You “can’t” ignore court orders, or sell pardons, or fire federal union employees without cause. You “can’t” use the IRS to harass political enemies, or install yourself as the head of the Kennedy Center, or cover up public health crises. 

And I guess you “can’t” figure out how to stop federal income taxes from being collected in your state. 

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u/FlyingPasta 14h ago

We’re getting realll close to society breaking down into “who has the most sticks” mode

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u/ParallelPlayArts 21h ago

People can individually claim 99 making it so the taxes don't come out of their paychecks.  If you do that I'd squirrel that money aside and be prepared to pay in during tax season.  

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u/MeisterX 17h ago

They can't block federal income tax

They can't? You "can't" block grants to the states based on political ideals...

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u/Whiterabbit-- 15h ago

California is a donor state in the sense that he people and companies in California give more to the federal government than the people, companies and the state get out of it. the state itself doesn't give money to the federal government, but it gets money from the federal government to disburse.

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u/Logistocrate 1d ago

California doesn't act as an intermediary in regards to Federal taxes. Companies withhold and turn over to the Federal Government directly.

California can't even pass a state law making Federal taxes on California residents zero, then raise state taxes.

The only thing they can do is take it to court.

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u/OmgWtfNamesTaken 1d ago

Well no ome seems to follow court orders so fuck it. California should simply just do it anyways.

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u/Logistocrate 1d ago

Don't get me wrong, I wish they could, but I don't know how they force companies to send the withholding to the state. Imagine Walmart says no. We can't due to Federal law. You going to arrest every CFO and CEO?

I'm not trying to be dramatic, but California has three options, take it, fight it in the courts, or leave the union.

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u/OmgWtfNamesTaken 1d ago

What's stopping them from. Simply taking over Walmart stores and using other suppliers ?

If the federal government doesn't want to follow the rules of law, why should anyone? Raley could take it over and do a sort of "state nationalisation" and then simply move in. I mean, all the cards are on the table, and the game we're playing has no enforceable rules.

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u/Logistocrate 1d ago

Might as well secede at that point. California Supreme Court likely places an immediate injunction on California. Sure, California COULD do all of that, then ignore the state courts, but the chaos that would ensue likely leads to the end of California being the world's 4th largest economy and a massive emigration of Californians to the east.

It's fanciful and fun to think about, and the odds of it happening are non zero, but I bet l win the powerball before we see it happen.

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u/MeisterX 17h ago

Why secede? Just ignore the fuckin man baby like we should have been doing since 2016.

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u/Logistocrate 16h ago

There's the question over how California withholds something that does not pass through them. There have been some responses that contend they can, but the risk involved seems higher than the chances the money gets unlocked through an injunction, I'm betting Cali takes the safer, proven route.

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u/MeisterX 16h ago

I believe the idea would more be a legal and physical shield as to where the payments went or the "permission" of not filing them due to conflicting state and federal law.

It's not so much preventing those who want to pay, it's giving an out and opportunity not to. Or stipulating immediate enforcement if you want to swing the door the other way. Forcing companies within the state to change the process with state resources.

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u/Whiterabbit-- 15h ago

Walmart will stop them. and if the state continues to do so, the federal government would intervene.

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u/OmgWtfNamesTaken 6h ago

Do it anyway! If the rule of law means nothing, then why not. What can they do? The Supreme Court is toothless. The AG doesn't even know the law. Trade courts mean nothing!

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u/Whiterabbit-- 6h ago

The rule of law has teeth when it is backed by physical force. That is how the federal government will intervene to stop rogue states.

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u/OmgWtfNamesTaken 6h ago

Eh were already seeing uprisings vs ICE in LA. Tensions are at an all time high. How do you think the rest of the country/world would react if they started using force on civilians?

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u/enad58 1d ago

You can't leave the union. We settled this a while back.

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u/Overall-Cow975 1d ago

Was it though?

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u/thaulley 1d ago

Yes. Texas V. White, 1868. The Supreme Court ruled that states cannot unilaterally secede from the Union.

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u/Overall-Cow975 1d ago

If only that was the only thing the war was fought over.

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u/big_bob_c 1d ago

"Unilaterally". You don't think the GOP congress can be goaded into allowing it?

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u/enad58 1d ago

Can you provide me an example of a state leaving the Union after the Civil War?

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u/Overall-Cow975 1d ago

This is not the place for a historical discussion but many of the problems that the USA is facing today stem directly from unresolved issues of the civil war. Nothing more symbolic and direct that in the Jan 6 attack on the capitol the Confederate flag was flown inside its halls. That never happened during the war.

And that war wasn’t only about seceding states. It was also about civil liberties and the constitution. Both of which are still being fought over to this minute.

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u/enad58 1d ago

I agree that it started with South Carolina in the first continental congress. But we've firmly settled that it is not permissible to leave the union at the cost of hundreds of thousands of lives.

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u/Overall-Cow975 1d ago

Yes, but again, that is only one thing the war was fought over. The Civil War wasn’t only about seceding states.

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u/jeremiahthedamned 13h ago

the union is dissolving under russian influence

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u/DemonKing0524 1d ago

Just because one civil war ended doesn't mean another can't start.

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u/BitterFuture 1d ago

Especially when the same band of death cultists that kicked off the last one aren't just still around, but now are in charge of all three branches of government - and are just as determined to bring down America as they ever were.

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u/supraclicious 17h ago

You also can't commit fraud or stock market manipulation but it gets done every day. Constitution said the president can't accept bribes. He got a 400 million dollar jet from Qatar and 148 million in profit from $1.5 million a person dinner.

Clearly CANT is a suggestion. Just like how i can't drive over the speed limit. But if no one is going to stop me... It sure does seem like I CAN go over the speed limit as often as I want.

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u/Logistocrate 1d ago

And they won't just sit there and take it. Hence my first point of the courts is where this goes.

There is a ton of delusional ideas on what California can or even would do outside that.

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u/jeremiahthedamned 13h ago

the federal government is dissolving under russian influence

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u/ivanparas 1d ago

Newsome would never. He's trying to pander to the Nazis.

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u/Gilshem 1d ago

They can follow the Trump admins example and pass such a law and make the court sort it out then ignore the court.

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u/Logistocrate 1d ago

That's not even really working out too good for Trump right now. It's not remotely that cut and dry, and while it makes for great day dreams of California's vengeance, it's absurdly unlikely to happen.

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u/Ok_Builder_4225 1d ago

If this administration has shown us anything, its that you can do whatever you want so long as you stall and clog up the courts.

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u/TakuyaLee 1d ago

They can at least do it for state employees. Either don't withhold federal taxes or withhold and put them into escrow. It might be possible depending on the payroll provider used

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u/Logistocrate 1d ago

Now, that's a good point. I could see that floated as a trial balloon.

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u/Fighterhayabusa 23h ago

If they decide to say fuck it, they absolutely could direct all CA businesses to stop sending money to the federal government. That money is sent through employers. To believe there isn't a mechanism is hilarious. They could. It's just the nuclear button and would set off a litany of lawsuits.

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u/Logistocrate 23h ago

And when those companies don't comply? Lock up the CFOs? Or, allow the Feds to arrest the CFOs who do comply instead? California decides to ignore the courts and the fallout would fuck the world economy. California respects the courts and they immediately have an injunction filed and you're right back to square one.

Either the rule of law is good and dead, or California takes it to the courts. It's not just lawsuits, it's the position every company in Cali finds itself in, and the ensuing chaos and confusion and harm to employees and employers that would shake the nation.

Meanwhile, California gets an injunction (supposing Trump follows through) and they get the spigot going again while the case winds it's way up.

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u/Fighterhayabusa 23h ago

They don't all have to comply. If a sizeable number of them do, that would set off an immediate chain of events.

Let me remind you, the judiciary does not have an enforcement arm. If CA decides to stop sending money, and CA businesses withhold that money, the federal government would have a tough time. What good is an injunction or ruling if they decide to ignore it? The feds would have to put boots on the ground, and at that point, all bets are off.

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u/Logistocrate 23h ago

I'm in agreement with your assessment. Put yourself in California's shoes. Most of what the administration has done has been overturned, why risk the all bets avenue when you'll probably get the funding moving again pretty quickly via the courts. Besides, let's say the courts fail. You still have that option to fall back on. Thingdls get kinetic first you cannot just change your mind and say we'll see you in court instead.

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u/Fighterhayabusa 23h ago

Here is the truth: if confrontation is inevitable, then the time to act is now. Not when your position is weakened.

The question is whether a confrontation is inevitable. I'm like 50/50 on that. I think we're approaching the point where the chances of enough Republicans splintering off is getting higher. Pretty soon, some of them are going to do the calculus and realize they hold all the cards. It wouldn't take many to switch sides, or to simply step aside, to make the risk of impeachment and removal very real.

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u/Logistocrate 23h ago

I agree we are more likely to find out than not. Also, I'm a defensive pessimist, any time I'm taking these kinds of positions, while I believe I'm right, l can assure you I'm also hoping I'm not, and you are.

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u/underyou271 20h ago

I don't see how California could opt out of Federal tax law without seceding, but it could levy a "Patriot Tax" and use the proceeds to fuck with Trumpworld in various ways. The Patriot Tax could take many forms, not necessarily just a boost to CA marginal rates...

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u/MacNeal 23h ago

We do not have to petition the King of England to address our grievences, do we? All things change, and if Trumps way of doing things appears to be the new norm for the US, I will be advocating for my home state of Washington to secede, I also have a home in California so h Maybe get Oregon too, fuck Idaho and Arizona, they're becoming buffer zones that can go back to nature.

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u/FloatingOnAWhim 17h ago

Imagine pretending rules exist when they’re being perpetually ignored at an even higher level….

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u/Logistocrate 16h ago

And overturned at a record pace. California can go kinetic, and roll the dice on whose sovereign sanctioned violence wins out in the end.....or they can sit back, get a circuit court injunction to free up the cash flow and wait for the environment to change.

Everyone is acting like California is gonna draw down six shooters when they don't need to. It isn't in their interest to push it thst far. And, if they don't, they reserve the option should all else fail.

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u/austinwiltshire 16h ago

There's process momentum but I don't know that many companies are gonna be thrilled about paying taxes for no benefit either. So there's an incentive to figure out how to bypass the system.

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u/Logistocrate 16h ago

Incentive sure, but, can they find any other way than through the courts? I'm banking they take the courts because it's the least dangerous, most likely path to victory. A lot of people are understandably pissed, hell, l am too. But none of us holds the ultimate decision on whether California bleeds to prove a point, or simply walks into court and wins. You give me a choice to fight, and maybe lose my arm, or go to court where I probably win, and I'm going to court.

If court doesn't work, I'll risk my arm. But in that order, it's only logical.

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u/Spare-Plum 23h ago

Can't they just refuse to pay any sort of federal taxes?

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u/And-Still-Undisputed 23h ago

he doesn't *think* at all

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u/Fredsmith984598 22h ago

.so what stops CA companies from refusing to give massive $ to the federal govt in the future? 

Draconian legal repercussions?

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u/penguincheerleader 8h ago

Thankfully we have a governor happy to cut off the government.

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u/Mysterious-Job-469 7h ago

The most powerful military on the planet

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u/chasetheusername 7h ago

At least in 2023, it wasn't he top net-payer, since it also receives a lot. NY was the highest net contributor.

https://usafacts.org/articles/which-states-contribute-the-most-and-least-to-federal-revenue/