Republicans accuse Democrat-led California and New York of taxing tips

Four Democratic-led states that rejected President Donald Trump’s policy of not imposing taxes on tips and overtime are being criticized by Republicans for opposing efforts to increase affordability.

Governors of the three largest Democratic-led states, California, New York and Illinois, continue to tax tips and overtime against Trump’s One Big Beautiful Bill Act, while Colorado will require taxpayers to report the amount deducted federally so it can be added back for state taxes in future years.

“Governor Hochul and the Democrats in Albany believe that your money is their money: They are lining the pockets of waitresses, bartenders and first responders who are working overtime just to make ends meet in a state that already has the highest tax burden in the country,” Rep. Mike Lawler, R-N.Y., told Fox News Digital.

“It’s no wonder workers and jobs continue to flee New York in record numbers, and we are consistently among the worst for out-migration every year.”

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Democratic governors. JB Pritzker, Jared Polis, Gavin Newsom and Kathy Hochul were all called out on Tax Day for rejecting President Donald Trump’s efforts to address affordability by not taxing tips or overtime. (Getty Images)

With “affordability” being a key political issue, Republicans countered with a Tax Day narrative against the governors of these four blue states facing midterm gubernatorial campaigns, including Hochul, who is running for reelection, and California Gov. Gavin Newsom, who is running this year.

“California Democrats talk a lot about making life more affordable, but when given the opportunity to let hard-working Californians keep more of what they earn, Gov. Newsom and the state Legislature refused to update the state tax code,” Rep. David Valadao, R-Calif., told Fox News Digital.

“No tax on tips or overtime would provide real relief to service workers, first responders and families across our state, and it’s disappointing to see Sacramento turn its back on them.”

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Governor Gavin Newsom speaks during a press conference at San Lorenzo High School as he signs an executive order to expand women’s access to capital and wealth-building opportunities, March 18, 2026, in San Lorenzo, California. (Tayfun Coskun/Anadolu)

Illinois Republican Party Chairwoman Kathy Salvi said that even though Illinois Gov. JB Pritzker is running for re-election in the nation’s third-largest blue state, he is actually positioning himself for a 2028 presidential campaign on Trump’s obstructionist agenda.

“Last year, President Trump delivered the largest tax cut in American history, putting millions of dollars back in the pockets of Americans. This common-sense legislation is good for Illinois, but future President JB Pritzker would rather close the door on opportunity and relief, knowing full well that he supported and enhanced Joe Biden’s economic disaster,” Salvi told Fox News Digital.

“The sad truth is that if President Trump is for it, JB Pritzker will still be against it.”

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Illinois Governor JB Pritzker answers questions during an event at Union Station in Chicago on December 16, 2025. (Eileen T. Meslar/Chicago Tribune)

Colorado Gov. Jared Polis, who is excluded and among the names potentially running in the 2028 Democratic presidential primary, has been called out by Rep. Gabe Evans, R-Colo., for taking steps to tax overtime in coming years.

“As a former Colorado cop, I know how important overtime pay is to first responders, blue-collar workers and hard-working families across America. That’s why I was proud to stand with Republicans in not imposing an overtime tax at the federal level,” Evans told Fox News Digital.

“But while we were fighting to provide relief to Coloradans, Governor Polis and state Democrats held a special session to retax overtime, ensuring that families will never see the benefits they have earned. The contrast couldn’t be clearer.”

Fox News Digital reached out to the offices of Hochul, Newsom, Pritzker and Polis for comment, but they did not immediately respond.

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Colorado Governor Jared Polis speaks to the National Governors Association at the Broadmoor Hotel in Colorado Springs, Colorado, July 25, 2025. (PA)

Even though the gubernatorial seats in these four blue states are likely safe due to Democrats’ considerable voter registration advantages, the down-ballot election has a talking point to make under the Trump banner and no-tax-on-tips-or-overtime policy.

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The Senate Finance Committee listed the One Big Beautiful Bill Act’s “wins” in all 50 states, including the four states blocked by Democratic leaders, where there still remains a permanent 20% deduction for many small business owners and a $1,500 increase in the standard deduction for millions of families.

• California: More than 3.1 million small business owners and 15.3 million families benefited.
• New York: More than 1.5 million small businesses, nearly 8.6 million families.
• Illinois: over a million small businesses, nearly 5.5 million families.
• Colorado: nearly 600,000 small businesses, nearly 2.6 million families.