I have written several posts on various topics, including the military, Voting, the economy, and religion in America. A list of links has been provided at the bottom of this article for your convenience. This article will, however, address additional issues in these topics.

Some “blue” states are increasing taxes, primarily on wealthy residents and property owners, to offset federal funding shortfalls and reduced federal revenues resulting from recent federal tax legislation, rather than to “spite” federal tax cuts. States are trying to compensate for fiscal shortfalls and reduced federal support for programs like Medicaid.

Key Actions and Motivations

Federal Impact on State Budgets: Recent federal tax legislation, which extended the 2017 Tax Cuts and Jobs Act (TCJA) provisions and included spending cuts to various programs, creates fiscal shortfalls for states. This necessitates states to find alternative revenue sources to maintain public services and social programs.
Targeting the Wealthy: The new state-level tax increases are largely aimed at higher-income individuals and luxury property owners, a strategy often described by critics as a “tax the rich” approach.
Decoupling from Federal Provisions: Some states, even some red states, are choosing to “decouple” from certain federal tax changes to protect their own revenue streams or to align their tax codes with state-specific priorities, illustrating that what benefits the federal government doesn’t always benefit individual states.
Maintaining Public Services: The motivation appears to be a practical need to balance state budgets and fund public services (e.g., education, infrastructure, social programs) rather than mere political spite.

Examples of State-Level Tax Changes

Several states have enacted or are considering tax hikes:

Maryland: Already increased tax brackets for high earners (above $500,000) and imposed a new capital gains tax.
Washington State: Increased its capital gains tax from 7% to 9% for million-dollar earnings.
Rhode Island: Introduced a new tax on vacation homes valued at over $1 million.
Connecticut: Lawmakers are considering higher income taxes for individuals making over $250,000 annually and couples making over $500,000.
Montana: Lawmakers are considering higher property taxes on second homes and vacation properties to reduce the burden on owner-occupied homes.
New York, Illinois, California: These states have largely declined to extend state-level tax breaks for new federal provisions like the exemption on tipped wages and overtime pay, citing billions of dollars in potential budget shortfalls as the reason for non-conformity.

Overall, these actions are driven by a need to address budget deficits and funding losses resulting from changes at the federal level

Liberal States Blocking Historic Tax Cuts for Hardworking Americans and Workers

U.S. Secretary of the Treasury Scott Bessent issued the following statement today regarding the ongoing refusal by several Democrat-led states to conform to key provisions of the July 4th bill that President Trump signed into law to deliver historic tax relief for American families and workers:

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.

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.

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.

Here are the blue states ‘blocking’ Trump’s popular tax cut provisions

Just eight states are on track to allow their residents to cash in fully on popular tax cuts from President Trump’s marquee legislation in 2026, experts told The Post, with several blue states unwilling to give workers an additional break.

The One Big Beautiful Bill Act exempted federal taxes on tipped wages and overtime pay, but hard-working residents will still have to pay state taxes on that income — unless local elected leaders step up.

Democratic strongholds like New York, Illinois and California have so far declined to extend state-level tax breaks, Reuters first reported, citing billions of dollars in potential budget shortfalls.

Other blue and red states alike have yet to signal whether they will take up legislation in the new year to conform to the federal tax code by changing the definition of what qualifies as taxable income. States like New Jersey are open to some of the provisions like not taxing tipped workers.

President Donald Trump speaking during a NORAD Tracks Santa Operation call. — Just eight states are on track to allow their residents to cash in on popular tax breaks from President Trump’s marquee legislation in 2026, experts told The Post.AP

Treasury Secretary Scott Bessent earlier this month accused several blue states — including Illinois and New York — of playing Ebenezer Scrooge this holiday season by “deliberately blocking” the popular One Big Beautiful Bill Act provisions, which will begin taking effect on Jan. 1.

Those included “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,” among others, Bessent charged.

Tax experts rejected the cabinet official’s claim that Colorado is snubbing the tax breaks, noting the state has what’s known as “rolling conformity” that aligns the Centennial State’s code with the Internal Revenue Code.

“Claims that Colorado is refusing to adopt the majority of tax changes from H.R.1 [One Big Beautiful Bill] are not accurate,” a spokesperson for Gov. Jared Polis (D) told The Post. “Even before H.R. 1, Colorado’s tax code was coupled more than most states by virtue of being one of the few ‘federal taxable income’ states. In fact, our tax code is coupled to the vast majority of provisions in H.R. 1. Therefore, all tax cuts in H.R. 1 are automatically incorporated into state tax code unless there is specific action to decouple.”

Other states that automatically align with the federal tax code include South Carolina, Iowa, North Dakota, Idaho, Montana and Oregon.

“Some states start with federal taxable income, so most of the new deductions flow through automatically unless lawmakers opt out,” explained Adam Michel, director of tax policy studies at the libertarian Cato Institute.

“Many more states—blue and red—start with adjusted gross income or run their own tax system, which means they don’t pick up these new deductions unless they affirmatively pass a bill to do so.”

NY Governor Kathy Hochul speaking at a podium with an American flag in the background. — Democratic strongholds like New York under Gov. Kathy Hochul are so far declining to incorporate the provisions in their own tax codes, Reuters reported, citing billions of dollars in potential budget shortfalls.Brigitte Stelzer

Michigan — which is currently helmed by Democratic Gov. Gretchen Whitmer — is the only US state so far to have adopted the tax breaks for overtime wages and tips. States like Kentucky and North Carolina have floated similar proposals.

Currently, South Carolina, North Dakota, Montana and Idaho are the only four states that are entirely conforming with Trump’s personal tax breaks on qualified tips, car loan interest, overtime premium pay and the $6,000 enhanced deduction for senior citizens.

Oregon and Iowa will conform to three of those same provisions — without the enhanced senior benefit.

And Colorado will keep the senior benefit but nix the overtime premium pay deduction.

Jared Walczak, vice president of state projects at the non-partisan Tax Foundation, added that there’s good reason for the 42 others not to automatically conform to the federal code for the breaks.

California Governor Gavin Newsom speaking and gesturing at a press conference. — California Gov. Gavin Newsom has opposed Trump’s One Big Beautiful Bill Act.REUTERS

“Most states conform at least in significant part to the Internal Revenue Code, and that’s still the case, but they don’t bring in every provision,” Walczak said, referencing how adjusted gross income levels at the federal level are the most obvious example.

“All of this is still up in the air for next year, and it’s not a clear red blue state divide,” he added. “The tax stuff gets dealt with around the same time that the state budget stuff is getting worked out early in the year in the legislatures.”

Walczak calculated how each provision would affect individual states’ tax revenues — with New York, for example, slated to lose as much as $1.7 billion.

“The temporary personal deductions are not very economically efficient, they’re not great tax policy, and they do come at a cost,” cautioned Walczak. “So states have to evaluate that as they consider whether they want to conform to them, and most states simply won’t do so.”

Mikie Sherrill delivering remarks at her election night watch party. — Under Gov.-elect Mikie Sherrill, New Jersey could become the second Democrat-led state to incoroporate the tax breaks.Getty Images

A spokesperson for New York Gov. Kathy Hochul didn’t rule out action entirely.

“We will continue finding ways to put money back in New Yorkers’ pockets and will evaluate federal changes in the context of the upcoming budget, just like red and blue states across the country,” Hochul’s rep said.

A rep for California Gov. Gavin Newsom directed The Post to a spokesperson for the California Franchise Tax Board who said that “legislation would generally be required for California to conform to provisions within the federal One Big Beautiful Bill Act.”

A rep for Illinois Gov. JB Pritzker did not respond to a request for comment.

State lawmakers’ dilemma – To conform or to decouple with OBBBA?

State legislatures wrestle with taxing tips and overtime, and how to balance revenue with relief.

After assessing the fiscal impact of OBBBA, state officials face a critical policy decision: Should the state follow the federal tax cuts, or not? This blog examines the legislative response—how state legislatures decide whether to conform to the most well known of OBBBA’s provisions for “No Tax on Tips” and “No Tax on Overtime”, and what those choices mean for taxpayers and practitioners.

Three paths forward: The legislative choices

When it comes to OBBBA’s “No Tax on Tips” and “No Tax on Overtime” provisions, states generally have three options:

Full conformity: Accept the federal changes, letting tips and overtime be untaxed at the state level.
Selective (partial) conformity: Adopt some parts of OBBBA but not others (e.g., allow the tip deduction but not overtime).
Non-conformity/decoupling: Reject the new federal deductions entirely, keeping tips and overtime fully taxable for state purposes.

States saying yes: Embracing federal tax breaks

Several states are embracing federal tax relief by aligning with or adapting to the OBBBA. Whether through automatic conformity, new legislation, or hybrid approaches, these states are finding ways to reduce tax burdens on tips, overtime, and bonuses while balancing budget impacts.

Rolling conformity states

States like Iowa, Montana, North Dakota, and Oregon automatically conform to federal taxable income. Unless they pass laws to decouple, these states will not tax tips and overtime in 2025.

Montana’s leadership, for example, welcomed the change because the revenue impact was manageable and aligned with the state’s history of not taxing tips.

Proactive legislative action

Some static conformity states have introduced bills to mirror OBBBA’s relief, showing how legislative priorities can override fiscal concerns:

Arizona: Passed a bill to eliminate state income tax on tip income, with a manageable revenue loss.
North Carolina: Proposed exempting tips, overtime, and some bonuses, though the bill had not passed by late 2025.
New Jersey: Introduced a bill to stop taxing all tip income, with no cap, specifically to help lower-income service workers.

Partial conformity

Colorado took a hybrid approach that offers a model worth watching. They decoupled from the overtime deduction to avoid a large revenue loss but allowed the tip deduction, targeting relief to lower-wage workers while protecting the budget.

This strategic compromise might influence other states facing similar budget pressures.

States saying no: Protecting revenue over relief

Several states have made clear they do not plan to conform to OBBBA’s provisions, prioritizing budget stability over federal alignment:

New York: As a static conformity state, NY will require taxpayers to add back any tip or overtime deduction on the federal return, citing the need to protect over a billion dollars in annual revenue.
California: With a projected $3.2 billion annual cost, California’s leadership signaled no intention to adopt the deductions, preferring to preserve funds for public programs.
Illinois: Will require an add-back for any tip or overtime deduction, as the state cannot afford the revenue loss.

Other states, such as Massachusetts, Connecticut, and Hawaii, have also indicated they will not conform, either by default or through explicit policy decisions.

The middle ground: Wait-and-see and states

Many states have not firmly committed either way as of October 2025. These “wait-and-see” states, including Georgia, Maryland, and South Carolina, plan to address OBBBA in 2026 sessions. For now, they continue to tax tips and overtime as usual, but could choose to adopt the deductions through legislation.

These states present both opportunity and uncertainty for tax professionals—changes could emerge mid-year, requiring agile client communication and planning adjustments.

What this means for tax professionals

These varied responses create a complex compliance environment that directly impacts your daily practice and client relationships.

Working with clients in conforming states

Your clients benefit from simplified compliance. Federal and state treatment align.

When explaining this to clients, you might say: “Good news: your tip income is tax-free at both levels, so we can adjust your withholding accordingly.”

Managing complexity in decoupling states

Here’s where your expertise becomes crucial. Clients will need clear explanations about why their state tax differs from federal.

Consider this language: “While your tips aren’t taxed federally, our state requires us to add them back. This means different planning strategies for withholding and estimates.”

Navigating uncertainty in wait-and-see states

These states present both opportunity and risk. Stay connected to legislative calendars and prepare clients for potential mid-year changes.

Your proactive monitoring becomes a competitive advantage.

Communication and planning with clients

As tax professionals, we should approach this evolving landscape strategically:

Monitor legislative development: Track state legislative agendas for conformity or tax bills mentioning tip/overtime provisions. This intelligence helps you anticipate changes before they impact clients.
Prepare clear client communications: Develop templates explaining whether your state is conforming or decoupling. Clients appreciate understanding why their state tax treatment differs from federal.
Adjust planning proactively: Modify withholding and estimates based on your state’s stance. This positions you as the advisor who thinks ahead, not just responds to changes.

Stay ahead of tax legislation

State legislatures are split on OBBBA’s tax breaks. Some see a chance to help workers and are all in, others view it as a costly and unfair gimmick and are opting out. Many are in the middle, weighing options.

This state-by-state response reveals something important about modern tax policy: federal changes no longer guarantee uniform state treatment. We’re entering an era where tax professionals must navigate increasingly complex state variations, making your expertise more valuable than ever.

By early 2026, the landscape will be clearer as more legislatures act. By staying ahead of these changes, you become the trusted advisor who helps clients navigate not just current law, but the patchwork of state responses to federal policy. Your clients depend on this strategic insight to make informed financial decisions in an increasingly complex regulatory environment.

Democrats Are Scheming To Spread the Tax Misery of Blue States Nationwide

f you live in Florida or another low-tax state, brace yourself. A bipartisan group of lawmakers from blue states is gearing up to punish you for your state’s fiscal restraint. They want to lift the cap on the federal income-tax deduction for state and local taxes, known as SALT.

If they succeed, middle-class Americans in red states will once again have to subsidize wealthy taxpayers in states such as California and New York, where leaders continue to double down on decades of fiscal mismanagement.

Before President Trump’s 2017 tax reform, the SALT deduction rewarded wealthy residents of high-tax states by reducing their federal taxes, while still giving them the same federal benefits.

This is in effect a hidden wealth transfer from less wealthy workers in low-tax states, who don’t get the deduction and have to pay more in federal taxes.

>>> Eight Reasons to Make the Trump Tax Cuts Permanent

Capping the deduction at $10,000 was an ingenious way to address that injustice. It protected middle-class households while letting wealthy residents of high-tax states feel the pain of their actual tax liabilities.

Coupled with heavy-handed COVID lockdowns, exposure to the reality of their states’ excessive taxation triggered mass migration. Since then, Florida has gained over a million new residents, while California and New York have each lost a million.

Now, blue-state congressmen of both parties are threatening to blow up President Trump’s tax cuts, which will expire unless extended this year, unless the SALT deduction is reinstated or greatly expanded. That would be a terrible mistake.

Raising the SALT cap primarily benefits the wealthy—households earning $200,000 or more—not the middle class. Middle-class families, who now almost always use the standard deduction, wouldn’t gain a cent.

Who pays the bill for this giveaway to affluent taxpayers? Everyone else. Increasing the SALT deduction creates budget shortfalls that would force higher taxes on the majority or lead to even greater, inflationary deficits. In short, middle-class families nationwide would bear the cost of restoring the abusive SALT deduction.

Worse still, the SALT deduction undermines competitive federalism—the very foundation of our constitutional arrangement. The genius of the Constitution’s original federal structure, as it existed before the progressive and New Deal transformation of a century ago, was that it forced states to compete for residents and capital by keeping taxes low and regulations minimal.

Progressives enamored of government deride that as a “race to the bottom.” They have consistently used the federal tax code to sabotage interstate competition, particularly after the 16th Amendment greatly expanded Congress’s taxing power in 1913. In the 1920s, they banded together in Congress to enact a federal estate tax, and then provided that people could deduct their state estate tax liabilities from the federal tax.

>>> Biden’s Giveaway to His Donors Is SALT in the Wound

The scheme specifically targeted Florida, which had earlier repealed its estate tax on its way to becoming the nation’s retirement haven. It deprived retirees of the choice between high-tax and low-tax states. Henceforth their choice would be between paying a high estate tax in their state or paying it to the federal government.

Florida sued, arguing that this scheme amounted to a federal tax on some states but not others. Alas, an increasingly progressive Supreme Court rejected the claim in Florida vs. Mellon (1927).

Today’s SALT advocates from California, New York, New Jersey, and Illinois complain about “double taxation,” yet it is they who routinely double- and triple-tax their constituents. Their real grievance? Trump’s SALT cap made their high taxes transparent to everyone—and politically costly.

Florida stands to lose a great deal from the push to restore the SALT deduction. It would erode the state’s competitive advantage, forcing it to subsidize fiscal irresponsibility elsewhere, and punishing Floridians for their state’s successful, pro-growth policies.

The SALT deduction isn’t just welfare for the wealthy. It’s a scheme to spread the tax misery of blue states nationwide. Congress should be thinking about repealing it entirely, not restoring it to benefit the wealthies

How can blue states fight back against Trump? With fiscal disobedience

By holding back federal tax revenues, Democratic governors can turn a one-sided assault into a constitutional showdown.

Against Illinois governor JB Pritzker’s objections, Donald Trump’s Pentagon has ordered hundreds of national guard troops to join his regime’s assault on Chicago communities. Trump subsequently called for Brandon Johnson, Chicago’s mayor, and Pritzker to be jailed for not supporting his agenda. These are simply the latest steps in Trump’s plan not to govern as the president of all Americans but to rule as the dictatorial head of a punitive factional state. Federal funding to Democratic cities is being slashed through executive maneuvers; the justice department is conducting politically targeted investigations and arrests; and the military is being deployed to intimidate fellow citizens. Los Angeles, Portland, my home town of Chicago and other cities have been cast as enemies to be subdued, not communities to be served.

This weaponization of federal power represents a sharp break with constitutional tradition. It’s not merely ideological hostility; it is economic coercion and the exercise of violence in service of a president’s whim. The Trump regime is selectively starving Democratic jurisdictions of federal funds, even as their residents continue to pay billions in federal taxes, with blue states accounting for over 60% of the federal government’s revenue. We are being compelled to subsidize our own political subjugation.

As the anthropologist Janet Roitman argued in her study of taxation and sovereignty in central Africa, acts of “fiscal disobedience” emerge not simply as refusals to pay but as political interventions that expose ruptures in the reciprocal obligations underlying fiscal authority. Taxation is never merely technical. It is the material expression of political belonging and shared obligation. When the state weaponizes fiscal power against certain communities while continuing to demand unquestioned revenue from them, it undermines its own claim to legitimate authority. In such contexts, withholding or conditionally redirecting tax flows can become a way to re-politicize the fiscal relationship. It makes explicit that the state has already broken the social contract. Blue states today occupy precisely this position: forced to fund a federal government that is actively targeting them, their residents and their institutions.

Faced with this reality, Democratic governors need more than legal complaints and rhetorical protest. They need fiscal strategies of resistance commensurate with the scale of the attack. And one of the most provocative – and potentially powerful – ideas available is the creation of state-administered escrow accounts, or “in trust” funds, to temporarily hold federal tax revenues until the federal government upholds its constitutional obligations and withdraws its authoritarian threats.

This may sound radical, but it is less secessionist than it may at first appear. It would not involve refusing to pay federal taxes outright, which would open individual taxpayers to prosecution. Instead, the state would act as a temporary custodian, receiving payments from residents and businesses equal to their federal tax liabilities, holding them in trust for the federal government, and releasing them only when certain constitutional conditions are met – such as the partisan cessation of federal defunding and the withdrawal of military deployments unauthorized by targeted states.

Such a maneuver would constitute a form of civil disobedience by a state, legally risky and certain to entail confrontation. But Democratic cities and states, progressive non-profits, universities, non-white immigrants, and public health institutions are already facing direct conflict with Trump’s government. This strategy would reset the terms of the conflict and reclaim power against an increasingly brazen Trump regime. It would also underline for everyone the authoritarian, violent nature of the federal government’s tactics rather than allowing them to proceed under the thin guise of “law and order”, as Trump leverages his control over legal systems to wage war against his personal enemies. It would transform what is now a one-sided assault into a constitutional struggle.

How it could work

States could establish this system through legislation to create a tax receivership fund, explicitly designated as a trust account for federal tax liabilities. Residents and businesses would make payments into this account instead of directly to the Internal Revenue Service (IRS). The state would acknowledge these payments as received on behalf of the federal government, and pledge to remit them in full once specific, legally defined conditions were met – say, the restoration of suspended federal funding and reversal of other punitive actions that violate constitutional guarantees.

Importantly, this scheme does not purport to nullify federal taxes or claim state sovereignty over them. It functions as a conditional remittance mechanism, akin to an escrow arrangement in contract law. Of course, the Trump-controlled IRS, which has already been weaponized by the regime, would not quietly accept this. It would likely treat payments into the state trust as non-payment and impose penalties. Legal challenges would ensue. But that is precisely the point: to force a constitutional confrontation over whether the federal government can target states for political punishment while continuing to demand unquestioned fiscal obedience.

For such a strategy to work, it cannot be the isolated action of a single state. A state acting alone could be punished, scapegoated, or financially squeezed into submission. But if multiple states act simultaneously, they can transform isolated legal defiance into a coordinated assertion of constitutional co-sovereignty.

Here, article I, section 10 of the constitution could offer an eventual tool: interstate compacts. These are agreements between states – subject to congressional consent, and thus not likely legally viable until and unless Democrats win back congressional majorities – that allow them to formally coordinate policy, pool resources, and create collective governance structures. With or without congressional approval, blue states could form a “fiscal sovereignty compact” to coordinate the legal, fiscal, and political strategies involved in holding federal taxes in trust. It could standardize escrow mechanisms across member states, ensuring legal coherence and shared administrative capacity; create a pooled legal defense fund to support court battles; coordinate triggers for releasing funds, so that the federal government faces a unified set of demands; and protect against selective federal retaliation by presenting a united front representing tens of millions of residents and trillions in economic output.

This compact would not need to involve all blue states to be effective. A coalition of economically powerful states – such as California, Illinois, New York, Massachusetts, and Washington – could represent a staggering share of federal revenue. If even a portion of federal tax remittances from these states were held in trust, the federal government would face not an isolated legal challenge but substantial fiscal obstacles to its current belligerence.

Building an anti-fascist federalism

Trump’s use of the federal government to punish political enemies represents an authoritarian turn in American governance. It betrays the basic premise of federalism – that states are coequal entities within a constitutional framework, not mere provinces under imperial command – that was the supposed cornerstone of the Republican party before it sold what little soul it had to a conman. Lawsuits and press conferences are inadequate responses to this kind of assault. What’s needed are mechanisms that translate state and citizen dissent into material leverage. Escrow accounts, when deployed through a coordinated strategy, do precisely this: they turn the flow of money, the lifeblood of federal power, into the explicit site of political struggle.

Such a move could have wide-rippling political effects. It would give residents a concrete way to participate in opposing the Trump regime, transforming legal disputes into collective political action. It would also force the supreme court, which is increasingly aligning itself with Trump against the constitution, to directly confront fundamental questions about the balance of state and federal power. Given the corruption of the courts, courtroom victory is neither the expectation nor the point in this strategy; it is instead to use the law to draw clear constitutional and fiscal battle lines – to make states active protagonists rather than passive targets.

Skeptics will call the above proposal unconstitutional, impractical or politically reckless. They are not wrong to note the risks. Under current federal tax law, states have no role in federal revenue collection. Courts might enjoin such efforts quickly. Administratively, state governments would need to build new fiscal infrastructure to receive and track payments. And Trump will seize on any opportunity to paint blue states as “insurrectionists” who must be violently crushed – but the regime is already inventing fictions to justify this regardless of on-the-ground realities.

Acknowledging risks is not the same as accepting them as decisive. The legal barriers to fiscal disobedience are formidable in part because the federal government has never before faced coordinated, large-scale challenges of this kind from wealthy states representing a majority of national tax revenue. The courts are not mechanical; they are political actors that respond to the balance of power and the perceived legitimacy of claims. Even if states ultimately lose in court, the process itself would publicly expose the authoritarian abuse of fiscal powers, force constitutional confrontation rather than quiet capitulation, and potentially reshape the political terrain.

As is evident from Chicago – where I am writing this with Black Hawk helicopters flying overhead night and day and where my friends, patients, elected representatives, and neighbors are being assaulted in their homes, in hospitals, and on the streets by federal agents acting with total disregard for either reality or legality – a rapid escalation of political violence in America is well under way. The Trump regime has made clear that it will continue to expand its campaign of violence with total impunity if we do not respond. In this context, refusing to counter fascism because retaliation might follow is not prudence; it is surrender.

State-administered escrow accounts will not solve the crisis of American democracy, but they could help shift the terrain of struggle away from unilateral federal domination and toward a contested, negotiated, and coordinated anti-fascist federalism much better equipped to contest the destruction of US democracy.

Conservative rips blue state Republican’s proposal to raise taxes on wealthy in SALT debate

A conservative Republican said he’s opposed to his moderate colleague’s proposal for a modest tax hike on high-income earners, as GOP lawmakers continue to navigate divisions over President Donald Trump’s “one big, beautiful bill.”

“Well, think about that — higher taxes to pay for something that is pretty much self-inflicted by all the states that don’t have their financials in order,” Rep. Ralph Norman, R-S.C., a member of the conservative House Freedom Caucus, told Fox News Digital on Sunday.

It comes as various House Republican factions are locked in high-stakes debates on taxes, Medicaid, and green energy subsidies while crafting Trump’s wide-ranging bill.

Rep. Nick LaLota, R-N.Y., suggested over the weekend that increasing the top tax bracket to a 39.6% income tax rate rather than 37% could help pay for higher deduction caps for state and local taxes (SALT).

The 39.6% rate refers to the top income tax bracket before it was lowered by Trump’s 2017 Tax Cuts and Jobs Act (TCJA).

SALT deduction caps primarily benefit people living in high-cost-of-living areas like New York City, Los Angeles, and their surrounding suburbs.

Republicans representing those areas, including LaLota, have argued that raising the SALT deduction cap is an existential issue — and that a failure to address it could cost the GOP the House majority in the 2026 midterms.

Several of the Republicans vying for higher SALT deduction caps have pointed out that their victories are critical to the party retaining control of the House in 2024.

SALT deduction caps did not exist before TCJA, which notably instilled a $10,000 ceiling for married and single tax filers.

“The One Big Beautiful Bill has stalled—and it needs wind in its sails. Allowing the top tax rate to expire—returning from 37% to 39.6% for individuals earning over $609,350 and married couples earning over $731,200—breathes $300 billion of new life into the effort,” LaLota wrote on X.

“It’s a fiscally responsible move that reflects the priorities of the new Republican Party: protect working families, address the deficit, fix the unfair SALT cap, and safeguard programs like Medicaid and SNAP—without raising taxes on the middle class.”

But Republicans in lower-tax states are largely wary of significant increases to those caps, believing them to incentivize blue states’ high-tax policies.

It’s one of several differences Republicans are working to reconcile over President Donald Trump’s “big, beautiful bill”

“People with money invest, and to tax them more — history has been, when you tax the other upper 1% more, you know, the economy does worse,” Norman argued. “More taxes don’t make sense to me.”

The current legislation would increase the SALT deduction cap from $10,000 to $30,000, but a majority of Republicans in the House SALT Caucus rejected the deal.

LaLota and others have contended it’s not enough for middle-class families in their districts.

“My party’s $30K cap proposal only makes 4 in 5 households whole. That’s not enough. On [Long Island], $250K isn’t rich—it barely covers the basics. Too many families pay over $15K in property taxes & get left out. I’m fighting for a higher cap. Wish me luck,” he said on X.

But while tax hike proposals targeting wealthy Americans were part of Republicans’ negotiations at an earlier point, any such effort appears to have been all but definitively stamped out.

House GOP leadership aides signaled to reporters on Monday morning that such a tax hike would not be in the final bill, pointing to Speaker Mike Johnson’s comments on the matter. Johnson, R-La., said on The Will Cain Show late last month that he was “not in favor of raising the tax rates, because our party is the group that stands against that, traditionally.”

But nevertheless, the differing viewpoints underscore the divisions that Republicans still have to navigate ahead of their planned House-wide vote on Trump’s bill later this week. Republicans are using the budget reconciliation process to advance Trump’s priorities on taxes, immigration, energy, defense and the national debt via one massive bill.

Budget reconciliation lowers the Senate’s threshold for passage from 60 votes to 51, thereby allowing the party in power to skirt the minority — in this case, Democrats — to pass sweeping pieces of legislation, provided they deal with the federal budget, taxation or the national debt.

Republican leaders want to have a final bill on the president’s desk by Fourth of July.

Fox News Digital reached out to LaLota’s office for comment on Norman’s remarks but did not immediately hear back.

Resources

-home.treasury.gov/news/press-releases, “Liberal States Blocking Historic Tax Cuts for Hardworking Americans and Workers.”;

–https://nypost.com/2025/12/26/us-news/here-are-the-blue-states-blocking-trumps-popular-tax-cut-provisions/, “Here are the blue states ‘blocking’ Trump’s popular tax cut provisions.” By Josh Christenson;

–https://tax.thomsonreuters.com/blog/state-decoupling-from-federal-tax-provisions/, “State lawmakers’ dilemma – To conform or to decouple with OBBBA?”;

–https://www.heritage.org/taxes/commentary/democrats-are-scheming-spread-the-tax-misery-blue-states-nationwide, “Democrats Are Scheming To Spread the Tax Misery of Blue States Nationwide.” By Mario Loyola;

–https://www.theguardian.com/commentisfree/2025/oct/19/blue-states-fight-back-against-trump, “How can blue states fight back against Trump? With fiscal disobedience.” By Eric Reinhart;

–https://www.foxnews.com/politics/conservative-rips-blue-state-republicans-proposal-raise-taxes-wealthy, “Conservative rips blue state Republican’s proposal to raise taxes on wealthy in SALT debate, House Republicans want to pass Trump’s ‘big, beautiful bill’ this week.” By Elizabeth Elkind;

Common Sense and Ramblings In America

Are Blue States Increasing Taxes in Spite of Federal Tax Cuts?

State lawmakers’ dilemma – To conform or to decouple with OBBBA?

Three paths forward: The legislative choices

States saying yes: Embracing federal tax breaks

Rolling conformity states

Proactive legislative action

Partial conformity

States saying no: Protecting revenue over relief

The middle ground: Wait-and-see and states

What this means for tax professionals

Working with clients in conforming states

Managing complexity in decoupling states

Navigating uncertainty in wait-and-see states

Communication and planning with clients

Stay ahead of tax legislation

How it could work

Building an anti-fascist federalism

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State lawmakers’ dilemma – To conform or to decouple with OBBBA?

Three paths forward: The legislative choices

States saying yes: Embracing federal tax breaks

Rolling conformity states

Proactive legislative action

Partial conformity

States saying no: Protecting revenue over relief

The middle ground: Wait-and-see and states

What this means for tax professionals

Working with clients in conforming states

Managing complexity in decoupling states

Navigating uncertainty in wait-and-see states

Communication and planning with clients

Stay ahead of tax legislation

How it could work

Building an anti-fascist federalism

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