TRENTON, NJ – Governor-elect Mikie Sherrill is facing criticism after suggesting New Jersey could “withhold” federal tax dollars as a form of protest against the Trump administration.
Her remarks, made during an appearance on comedian Jon Stewart’s podcast, prompted a wave of confusion and rebuke, with state lawmakers accusing her of misunderstanding how the federal tax system works.
Assemblywoman Dawn Fantasia was among the first to respond, calling the proposal “impossible” and noting that New Jersey does not collect or control federal income taxes.
“Does . @MikieSherrill not understand the system, or does she think YOU don’t? NJ doesn’t collect or send federal income taxes to Washington. Residents & businesses pay the IRS directly. NJ has no magical pile of federal tax money sitting in Trenton to withhold,” Fantasia said.
Key Points
- Gov.-elect Mikie Sherrill said she often thinks about withholding federal tax dollars as a protest.
- Critics, including Assemblywoman Dawn Fantasia, say the idea misunderstands how taxes are collected.
- New Jersey sends more money to Washington than it receives back, according to federal data.
A political statement without a policy path
Sherrill’s comments came amid broader conversations about states pushing back on federal policy. “If they’re not gonna run the programs, then what are we paying them for?” she said, comparing it to refusing payment for undelivered services.
Assemblywoman Fantasia corrected Sherrill’s false promises.
“For anyone thinking NJ can hoard state employees’ federal payroll taxes, you might want to think through that one again. The state acts as a payroll processor only,” Fantasia said. “The employee never “opted” to loan money to the state. The employee earned it and it was withheld solely to be delivered to the federal government. Keeping it would be the same as an employer stealing a portion of an employee’s wages and it’s not the state’s money to give or not give. This isn’t a political opinion. No public or private employer has the legal right to withhold federal taxes from a paycheck and then refuse to send them to the federal government.”
In fact, it is a crime, one that nearly landed Ocean County GOP Chairman George Gilmore in prison a few years ago. The influential Democrat lobbyist collected employee payroll taxes and spent it on lavish items such as elephant tusks, vintage coca cola machines, vintage typewriters, and pinball machines, according to court records.
He was convicted and sentenced to a year in prison, but was later pardoned by President Trump.
Sherill’s team has not clarified how such a move could be executed, and experts say there is no legal mechanism for a state to intercept or withhold federal income tax payments. The Rockefeller Institute reports that New Jersey routinely contributes more in federal taxes than it receives in federal spending.
The idea echoes remarks made by California Governor Gavin Newsom in 2024, when he floated a similar tax-withholding proposal that was later dismissed as unworkable.
Sherrill’s suggestion highlights growing frustration among Democratic governors over federal funding disparities, but for now, the idea remains more rhetorical than real.