Treasury chief: Blue states blocking OBBBA tax relief
Treasury Secretary Scott Bessent on Wednesday accused Colorado, New York, Illinois and Washington, D.C., of refusing to adopt key provisions of President Trump’s One Big Beautiful Bill Act, arguing their residents are being denied tax cuts like “No Tax on Tips,” “No Tax on Overtime,” and a new seniors’ Social Security deduction. Calling the stance “obstructionism,” Bessent urged immediate conformity, said Treasury is ready to help, and warned the department “will not stand idly by” as non‑conformity drags on the recovery.
📌 Key Facts
- Bessent named Colorado, New York, Illinois and D.C. as non‑conforming jurisdictions.
- Cited OBBBA provisions: no tax on tips, no tax on overtime, and a new deduction for seniors on Social Security.
- Framed the law as signed July 4, 2025, and urged holdout states to conform immediately.
📊 Relevant Data
Tipped workers in the US are more likely to be people of color, women, women of color, or single parents, and are disproportionately born outside of the United States.
Tipping is a racist relic and a modern tool of economic oppression in America — Economic Policy Institute
Among tipped workers, Black women (43.2%), Native women (38.0%), and Latinas (33.9%) are more likely than White, non-Hispanic men (24.4%) to live in poverty, based on 2023 data.
Women Fare Better in States with Equal Treatment for Tipped Workers — National Women's Law Center
Black and Hispanic/Latino Social Security beneficiaries aged 60 or older have lower median monthly benefits (Black: $786, Hispanic: $598) compared to White non-Hispanic ($966), and higher poverty rates, based on 2023 projections.
Projected Profile of Beneficiaries — Social Security Administration
States may choose not to conform to federal tax cuts, such as those in OBBBA, to avoid reducing their own state revenue, as automatic conformity could lead to revenue losses without legislative approval.
How Does Federal-State Tax Conformity Work? — Institute on Taxation and Economic Policy
In the service sector, women and people of color are over-represented, with racial disparities in earnings; for example, in 2023, Black workers' median weekly earnings were $967 compared to $1,157 for White workers.
Inequalities in the Service Sector — The Shift Project