New York and Illinois Move to Block Trump Tax Cuts for Workers

While millions of hardworking Americans prepare to benefit from President Trump’s bold new tax reforms, two deep-blue states are doing everything they can to block those savings from reaching their residents.

New York and Illinois both notorious for high taxes and fiscal mismanagement are actively decoupling from the most popular provisions in Trump’s One Big Beautiful Bill, including tax exemptions on tips, overtime pay, and car loan interest. In other words, if you work extra hours or rely on gratuities to make ends meet, these states want to keep taxing your hustle.

The new federal tax law includes:

• Zero federal income tax on qualified tips, overtime pay, and car loan interest

• A $6,000 enhanced deduction for senior citizens

• Streamlined tax benefits for workers and small businesses

But instead of letting these benefits flow to their citizens, liberal lawmakers in Albany and Springfield are digging in their heels. Despite existing laws that would typically cause federal changes to trickle down into state tax codes, both states are mandating "add-backs" meaning they’ll force workers to pretend the deductions never happened when calculating their state taxes.

Why? Because they don’t want to lose the revenue that props up their bloated budgets and pet projects. It’s not about fairness or fiscal prudence. It’s about control.

According to the Cato Institute, most red states are working to align their tax codes with the new federal changes or already do so by default. States like South Carolina, North Dakota, Idaho, and Montana have fully adopted the new breaks, while Arizona has already passed a law exempting tips from taxation.

In contrast, liberal strongholds like California, New York, and Illinois are refusing to let go of the cash, even if it means penalizing waitresses, truck drivers, and senior citizens trying to make a living.

Meanwhile, in Colorado, another blue state, the changes will automatically apply, because the state calculates taxes based on federal taxable income, not adjusted gross income (AGI). But that hasn’t stopped the media from trying to lump all blue states together in opposition to Trump’s tax agenda.

“Many states blue and red start with AGI or run their own tax system,” said Adam Michel of the Cato Institute. “They don’t pick up these new deductions unless they affirmatively pass a bill to do so.”

That’s exactly what New Jersey and North Carolina are trying to do now: pass legislation to ensure workers get the full benefit of federal tax cuts, without interference from their state governments.

This is the contrast voters need to see as we head into 2024:

• Republican states cutting taxes, increasing take-home pay, and respecting work.

• Democrat states clinging to power, raising taxes, and punishing productivity.

If you’re a worker in New York or Illinois, the message from your government is clear.
You don’t deserve the same relief your fellow Americans are getting.

Share this with friends in blue states and subscribe to our newsletter for updates as we continue to track how Democrats are sabotaging your savings.