Several states led by Democrats, including Colorado, New York, Illinois, and the District of Columbia, are declining to adopt provisions from a federal tax relief bill signed into law on July 4th by President Trump. The legislation aims to provide tax cuts for American families and workers by removing taxes on tips for service industry staff, eliminating taxes on overtime pay for certain workers, and introducing a new deduction for seniors relying on Social Security.
U.S. Secretary of the Treasury Scott Bessent criticized these states’ actions in a statement released Wednesday. According to Bessent, “President Trump’s tax cuts bill is the most pro-worker, pro-family legislation in a generation. It puts more money directly into the pockets of hardworking Americans through No Tax on Tips for dedicated service industry staff, No Tax on Overtime for linemen and factory workers, and a new tax deduction for seniors who depend on Social Security.”
Bessent further stated that the refusal by these states to align with the federal law prevents their residents from benefiting at the state level. He said, “Yet in a blatant act of political obstructionism, liberal strongholds like Colorado, New York, Illinois, and the District of Columbia are deliberately blocking their own residents from receiving these historic benefits at the state level. This partisan stonewalling is a direct assault on the very families and workers liberal politicians claim to champion. By denying their residents access to these important tax cuts, these governors and legislators are forcing hardworking Americans to shoulder higher state tax burdens, robbing them of the relief they deserve and exacerbating the financial squeeze on low- and middle-income households.”
The Treasury Secretary called upon those states to reconsider their stance: “President Trump’s vision is clear: real relief for the forgotten men and women of America, certainty for businesses, and momentum for growth. We call on these holdout states to immediately conform and stop punishing their citizens for partisan games. The American people voted for bold change, not bureaucratic roadblocks. Treasury stands ready to work with any state committed to delivering on that promise, but we will not stand idly by as this obstructionism drags down the national recovery. This is about fairness. This is about opportunity. And this is about putting America first, starting with the families and workers who make our economy the envy of the world.”
