It's time for Cascadia to impound federal taxes
As Washington and Oregon face numerous economic threats, including the real possibility of recession, disastrous flooding, continued wildfires, and massive cuts to the federal budget by the Trump administration, it's time to consider an idea that's been gaining traction in blue states hit hard by Trump's authoritarian rule: holding federal taxes in escrow until we receive guarantees that federal spending will be used for us and not against us.
The idea is controversial if relatively simple to implement: pass legislation in Washington and Oregon that creates an escrow account in the state treasury, and then direct all state businesses and/or residents to pay federal taxes into this fund rather than to the IRS. Once an annual audit is performed to ensure there isn't a huge imbalance, or tax dollars aren't being used to harass or harm our residents, the payments can go forward to the federal treasury.
The idea of states withholding federal tax revenue in response to retaliatory cuts and corruption by the Trump regime has recently been floated by New Jersey governor Mikie Sherrill and California governor Gavin Newsom. But details from those two leaders about plans have been scant.
Earlier this year, however, Eric Reinhart at the Guardian laid out a plan for blue states to set up escrow accounts for federal taxes, and in November Christopher Armitage at the Existentialist Republic went into more detail about how such escrow accounts would work and how they could prevent both retaliation in the budget and corrupt spending. Armitage and Reinhart are quick to point out that one or two states going it alone is probably not a good idea – so Cascadia should urge large states like California, Illinois, and New York to collaborate on this effort.
And strangely enough, there's already existing Washington state legislation that could lay the groundwork for setting up a state tax escrow account. Tea Party Republicans in Washington drafted a bill in 2010 in response to the Obama administration that would have set up an escrow account and established a review process to ensure tax revenue was going where state residents want it to (the bill never passed out of committee). Progressive Democrats would do well to review this legislation and re-introduce a modified version. Passing legislation establishing a Washington State Bank would also help.
Would such an escrow plan be constitutional? Maybe, maybe not. Armitage, in his essay, argues that it doesn't actually matter, now that the Trump administration is willing to defy courts and ignore the rule of law. He also points to the example of state-based cannabis legalization: the federal government didn't allow states to legalize, but states did it anyway and the feds declined to enforce federal law. If enough states participated in the escrow program, there would be little the feds could do to force us to pay it. And if needed, Cascadia could begin the process of separation.
"Institutions [have] already collapsed. What remains is whether to acknowledge that collapse and build alternative accountability mechanisms, or continue pretending institutions still function while they’re systematically weaponized against you. Tax escrow creates consequences for executive lawlessness where none currently exist." – Christopher Armitage
Washington state, prior to the Trump administration, in 2024, paid $57 billion more in taxes than it received back in funding. In 2025, in the first year of the new Trump administration, Washington has already been hit with $3 billion in annual cuts to Medicaid (Apple Health), $1 billion in cuts to clean energy projects, potentially $845 million in education spending cuts if the administration makes good on its threat to eliminate the Department of Education, and $120 million in slashed HUD funds for homeless services.
And all this while the administration squanders $901 billion on its military budget and $170 billion on immigration enforcement and mass deportations.
It's time to stop our hard earned tax dollars for being spent outside Cascadia or being used to harass and harm our residents.
--Andrew Engelson
