Blue State Governors Block Trump’s Tax Relief, Rob Workers of Paycheck Gains

Paul Riverbank, 12/11/2025Trump's tax relief splits states—some workers benefit, others see little change amid ongoing political battles.

Three hundred miles north in Chicago, Lena checks her pay slip on a break, thumb darting nervously over the patched-up screen of her phone. Her numbers haven’t changed, not really. Whatever she heard on TV about the “One Big Beautiful Bill” feels a bit hollow. Tips, overtime—still taxed, just as before. She squints, does the math in her head, and tucks the phone away. There’s not much left to say.

This is reality in the wake of President Trump’s OBBB, a law he’d touted as a game-changer for folks living paycheck to paycheck. Major promises—no federal tax on tips, a break for workers clocking overtime, sweeter terms for retirees on Social Security. Secretary of the Treasury Scott Bessent didn’t bother with soft-selling it. He called the law “a pay raise for people who break their backs every day.” In Texas and Missouri, this message landed like a parade confetti canon—cheers, applause, and for many, a larger take-home. “No more federal tax on tips or overtime,” he boasted. “Tax relief for those who actually need it.”

But closer to the Great Lakes, sentiments chilled. Illinois, New York, Colorado, and DC all declined to follow Washington’s lead. State taxes didn’t budge, and the old numbers stubbornly stuck around on pay stubs. So, while some workers started saving for new tires or maybe a weekend away, others just kept watching another slice of their paycheck disappear, month after month.

When pressed for comment, most governors shrugged—figuratively, at least. Budgets, they said, aren’t magic. “Our schools aren’t funded by wishful thinking,” a senior Albany policy aid told me, almost apologetic. “If you want to cut taxes here, show me where the money’s coming from.” The implication was obvious: every dollar set free by a state cut would need to be found elsewhere, or else services would take the hit.

The Treasury Secretary, unamused by these explanations, aimed sharper words at blue state leaders, accusing them outright of “punishing their own citizens.” He singled out specific governors, branding them as obstacles. If families in St. Louis were uncorking champagne, his argument went, why force those in Chicago to stick with tap water? It was a rhetorical jab—one played up, too, by Republicans eager for a mid-campaign soundbite. “Historic tax relief,” Speaker Johnson called it. Behind closed doors, the White House surely savored the split, casting Republican-led states as champions for the “forgotten class.”

On the flip side, Democratic leaders avoided the microphones. The comms teams replayed the greatest hits: fiscal responsibility, protecting schools, safeguarding transit. Off the record, one Illinois staffer acknowledged, “It’s not like we don’t want to help servers or factory workers. It’s just not that easy.” No one wanted the optics of siding with Trump, but neither did they relish disgruntled waitstaff confronting them at the next town hall.

Meanwhile, on social media, battle lines hardened. The phrase “Grinches Who Stole Christmas” stuck to some governors like sap, circulating in memes and scathing tweets as soon as Bessent uttered it. In Houston, servers posted photos of their beefier end-of-week envelopes; in Brooklyn, bartenders vented, wondering if relief would ever actually hit home.

For all the political theater, the static remains in the checkbooks—federal relief here, state taxes there, a dance of numbers that means less or more depending on where you pour drinks or repair generators. The real divide isn’t so much red versus blue as it is between those whose bank accounts just swelled and those still anxiously watching every dollar.

Nobody’s really certain how (or if) the states will reconcile it all. For now, some workers savor the change, others simply shake their heads. In kitchens, garages, and dimly-lit bars, the question lingers: Who’s going to blink first? Until then, each pay slip tells its own unfinished story.

It’s Friday night in St. Louis, the kind of humid summer evening when sweat beads on your brow faster than you can swipe it away. Pete, a bartender at a boisterous downtown bar, slides a handful of wrinkled bills off the sticky wood and pockets them with a grin. He’s heard about changes in Washington before, but this one’s different: his tips, at least on the federal side, are his to keep—untaxed. He jokes with another server, “Finally, the feds can’t take their cut.” They both laugh, but it isn’t lost on them that, for once, laughter feels like actual money in their pockets.Three hundred miles north in Chicago, Lena checks her pay slip on a break, thumb darting nervously over the patched-up screen of her phone. Her numbers haven’t changed, not really. Whatever she heard on TV about the “One Big Beautiful Bill” feels a bit hollow. Tips, overtime—still taxed, just as before. She squints, does the math in her head, and tucks the phone away. There’s not much left to say.This is reality in the wake of President Trump’s OBBB, a law he’d touted as a game-changer for folks living paycheck to paycheck. Major promises—no federal tax on tips, a break for workers clocking overtime, sweeter terms for retirees on Social Security. Secretary of the Treasury Scott Bessent didn’t bother with soft-selling it. He called the law “a pay raise for people who break their backs every day.” In Texas and Missouri, this message landed like a parade confetti canon—cheers, applause, and for many, a larger take-home. “No more federal tax on tips or overtime,” he boasted. “Tax relief for those who actually need it.”But closer to the Great Lakes, sentiments chilled. Illinois, New York, Colorado, and DC all declined to follow Washington’s lead. State taxes didn’t budge, and the old numbers stubbornly stuck around on pay stubs. So, while some workers started saving for new tires or maybe a weekend away, others just kept watching another slice of their paycheck disappear, month after month.When pressed for comment, most governors shrugged—figuratively, at least. Budgets, they said, aren’t magic. “Our schools aren’t funded by wishful thinking,” a senior Albany policy aid told me, almost apologetic. “If you want to cut taxes here, show me where the money’s coming from.” The implication was obvious: every dollar set free by a state cut would need to be found elsewhere, or else services would take the hit.The Treasury Secretary, unamused by these explanations, aimed sharper words at blue state leaders, accusing them outright of “punishing their own citizens.” He singled out specific governors, branding them as obstacles. If families in St. Louis were uncorking champagne, his argument went, why force those in Chicago to stick with tap water? It was a rhetorical jab—one played up, too, by Republicans eager for a mid-campaign soundbite. “Historic tax relief,” Speaker Johnson called it. Behind closed doors, the White House surely savored the split, casting Republican-led states as champions for the “forgotten class.”On the flip side, Democratic leaders avoided the microphones. The comms teams replayed the greatest hits: fiscal responsibility, protecting schools, safeguarding transit. Off the record, one Illinois staffer acknowledged, “It’s not like we don’t want to help servers or factory workers. It’s just not that easy.” No one wanted the optics of siding with Trump, but neither did they relish disgruntled waitstaff confronting them at the next town hall.Meanwhile, on social media, battle lines hardened. The phrase “Grinches Who Stole Christmas” stuck to some governors like sap, circulating in memes and scathing tweets as soon as Bessent uttered it. In Houston, servers posted photos of their beefier end-of-week envelopes; in Brooklyn, bartenders vented, wondering if relief would ever actually hit home.For all the political theater, the static remains in the checkbooks—federal relief here, state taxes there, a dance of numbers that means less or more depending on where you pour drinks or repair generators. The real divide isn’t so much red versus blue as it is between those whose bank accounts just swelled and those still anxiously watching every dollar.Nobody’s really certain how (or if) the states will reconcile it all. For now, some workers savor the change, others simply shake their heads. In kitchens, garages, and dimly-lit bars, the question lingers: Who’s going to blink first? Until then, each pay slip tells its own unfinished story.