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Here's Why the "Blue States Stop Paying" Noise Should Stop [1]

['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']

Date: 2025-09-03

We’ve had a spate of articles in recent days encouraging state governments to interfere in the collection of Federal taxes, up to and including the notion that states should force their employees not to have Federal taxes withheld/submitted from their paychecks:

Democrat (sic) leaders could also pass legislation instructing state and municipal employees to alter their federal withholding forms to cut off federal revenue

These articles hit to the Trending List with all sorts of “Yeah! Bring it on! Do this now!” and “Stick it to Trump!” commentary. There’s only one slight problem with all of this:

YOU’RE ALL THROWING TAXPAYERS AND EMPLOYERS UNDER THE BUS.

Sure, it’s fine for you to stop your withholding of personal income taxes, but what about actually “cutting off Federal revenue” when the time comes to pay up? What about the non-submission of payroll and employer taxes, which another recent Trending List diary suggested be done/threatened as “leverage” or “protest” by the California state government?

If such a thing were to happen, the IRS won’t be going after state governments; they’ll go straight for the individual taxpayers. Now, what does it mean when the IRS goes after someone for delinquent taxes? Take a few minutes and read this short (8-page PDF) explanation of The IRS Collections Process. Let’s talk about what the IRS can take on their own authority, with no need for judicial review or approval. In general terms:

Examples of property we can seize (“levy”) Wages, salary, or commission held by someone else. [...] Other payments you receive, such as dividends and payments on promissory notes, are also subject to seizure.

Your bank account. Seizure of the funds in your bank account will include funds available for withdrawal up to the amount of the seizure. [...]

Your retirement account, including Qualified Pension, Profit Sharing, and Stock Bonus Plans under ERISA; IRAs, Retirement Plans for the Self-Employed (such as SEP-IRAs and Keogh Plans) and the Thrift Savings Plan.

Your federal payments. As an alternative to the levy procedure used for other payments such as dividends and promissory notes, certain federal payments may be systemically seized through the Federal Payment Levy Program in order to pay your tax debt. [...] The federal payments that can be seized in this program include, but aren’t limited to, federal retirement annuity income from the Office of Personnel Management, Social Security benefits under Title II of the Social Security Act (OASDI), and federal contractor/vendor payments.

Your house, car, or other property. If we seize your house or other property, we will sell your interest in the property and apply the proceeds (after the costs of the sale) to your tax debt.

They’d also go after employers for both withheld employee taxes (income, Social Security, and Medicare) AND employer taxes (their part of Social Security and Medicare taxes, as well as their Federal unemployment taxes). As IRS Publication 15, Employer’s Tax Guide, makes clear:

Outsourcing payroll duties. Generally, as an employer, you’re responsible to ensure that tax returns are filed and deposits and payments are made, even if you contract with a third party to perform these acts. You remain responsible if the third party fails to perform any required action. [...] Depositing taxes. Generally, you must deposit federal income tax withheld and both the employer and employee social security and Medicare taxes. You must use EFT to make all federal tax deposits. [...]

Those deposits have to happen either biweekly or monthly. As soon as a business misses a deposit, the IRS can initiate the collections process, with many of the same targets available for use against businesses as were listed for use against individuals above.

There’s nothing the state governments can do to prevent the IRS from pursuing collections, either, so these notions are non-starters any way you slice it.

In summary:

You’re all asking state governments to set their employees and/or businesses up to bear the full wrath of the IRS, because the legal responsiblity for payment of taxes lies with individual taxpayers and employers, not the state government(s).

We should not be encouraging that.

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[1] Url: https://www.dailykos.com/stories/2025/9/3/2341630/-Here-s-Why-the-Blue-States-Stop-Paying-Noise-Should-Stop?pm_campaign=front_page&pm_source=latest_community&pm_medium=web

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