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TaxBuzz Top 5 - CA Billionaires Face New Proposed Wealth Tax, Minneapolis Eyes City Income Tax & More

by
Rebekah Barton
on
10/24/2025
TaxBuzz Top 5 - CA Billionaires Face New Proposed Wealth Tax, Minneapolis Eyes City Income Tax & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. Minneapolis Weighs City Income Tax to Ease Property Tax Burden

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Credit: Sean Pavone/Getty Images

Minneapolis officials are exploring the idea of introducing a city-level income tax or a series of new local fees to reduce dependence on property taxes, which have climbed sharply over the past decade. 

Mayor Jacob Frey’s proposed 2026 budget includes a 7.8% property tax levy increase, the city’s largest since 2010, sparking concern over affordability. City staff say new revenue tools could make Minneapolis less reliant on homeowners to fund essential services like policing, infrastructure, and housing.

Proponents argue that an income-based tax would distribute costs more equitably, shifting the burden toward higher earners. Critics, however, warn the plan could face legal barriers under Minnesota law, which currently limits cities’ ability to impose their own income taxes.

The city council has ordered a full analysis of potential revenue scenarios before any decision is made. Officials say they hope to strike a balance between fiscal sustainability and fairness — but even early discussions highlight the growing tension between tax reform, affordability, and political feasibility in America’s mid-sized cities.

2. DeSantis Doubles Down on Property Tax Elimination, House Skeptical

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Credit: Chip Somodevilla/Getty Images

As Florida's property tax debate rages on, Governor Ron DeSantis is stepping up his commitment to eliminating property taxes for homeowners, proposing a constitutional amendment for the 2026 ballot that would let voters decide the fate of state-wide relief. “I think that property taxes have pinched a lot of people … If you’re a Florida resident and you have a primary residence here, I think you should be able to own that free and clear of the government,” he said. 

While DeSantis is pushing full steam ahead, the Republican-controlled state House is moving more cautiously. They’ve convened a 37-member committee to study how property taxes affect homeowners and local government budgets. Rep. Toby Overdorf, who chairs the panel, acknowledged serious concerns about sustaining essential services if property-tax revenue vanishes. 

Earlier this year, DeSantis offered homeowners a $1,000 rebate as a short-term relief while the longer game plays out. Critics, however, warn the broader plan is fiscally risky: millions in revenue support schools, fire departments and local services. Tax analysts say simply abolishing property tax without replacing the funds would shift burdens to other taxes or result in deeper cuts. 

With Florida already lacking a state income tax, the governor’s aggressive focus on property taxes underscores his long-term strategy to position Florida as a low-tax haven—but the political and financial logistics remain contentious. Local governments are watching closely: if the shift happens, they’ll need state support or entirely new revenue tools.

3. California Billionaires Face One-Time 5% Wealth Tax

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Credit: ©Studio One-One/Getty Images

A proposed California ballot initiative would impose a one-time 5% tax on the global net worth of state residents with fortunes of $1 billion or more, targeting roughly 200 individuals. Backed by the union Service Employees International Union (SEIU-UHW), the “California Billionaires Tax Act” is framed as a response to massive federal cuts affecting the state’s health care and education systems.

Organizers say it could raise about $100 billion, with 90% of revenue directed to Medicaid (Medi-Cal) and 10% to K-12 education. The measure must gather 875,000 valid signatures to qualify for the November 2026 ballot and would require a 60% voter approval once there. Opponents warn the tax could spur an exodus of high-net-worth individuals, though proponents argue a one-time levy is unlikely to prompt large-scale relocation. 

With four of the top ten wealthiest people worldwide residing in California, the stakes are significant not just for state revenue but for tax policy precedent. 

4. UK Government, Rachel Reeves Eye Tax Shift for High-Earning Professionals

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Credit: Dan Kitwood/Getty Images

The UK Treasury is exploring changes to tax rules that could raise the tax burden for certain high-earning professionals — including doctors, lawyers, and accountants — particularly those operating through private limited companies or partnerships. According to the article, the move reflects a broader sensitivity in government to perceived tax avoidance by highly paid individuals via corporate structures.

A key change under review is whether the government will restrict access to lower corporation tax rates or dividend tax advantages for professionals who pass income through their own service companies. Such arrangements have drawn criticism from Treasury officials who say these individuals may not face the same effective tax rate as employees doing similar work. The article quotes one senior official stating that the public “expect fairness” in how top professionals are taxed.

Industry groups are already sounding alarms. The CenTax think tank has estimated imposing employer national insurance on all forms of partnerships would raise around £2bn a year.

If enacted, these changes would align with the government’s goal to raise revenues while preserving public trust in the tax system. But they also pose potential risks: high-income professionals may restructure or relocate, and the government will need to calibrate any changes carefully to avoid unintended knock-on effects for the UK’s service economy.

5. 2026 Tax Season Refunds to Reflect Billions in New Tax Cuts

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Credit: Stefani Reynolds/Bloomberg/Getty Images

The sweeping tax and spending law known as the One Big Beautiful Bill, signed in July 2025, is already shaping up to deliver bigger tax refunds (CBS) for many Americans when filing for the 2025 tax year in early 2026. According to an analysis by Oxford Economics, taxpayers could see an extra $50 billion in refunds or lower tax bills—approximately an 18 % increase above the $275 billion in refunds issued last year by the IRS. 

The law retroactively extends tax cuts to the start of the year, meaning many taxpayers likely over-withheld based on old tables—and are poised for a windfall. “Many taxpayers will pay too much in tax this year and see larger tax refunds or smaller tax bills next year,” said lead economist Nancy Vanden Houten at Oxford in the aforementioned CBS report.

Analyses suggest the lion’s share of benefits goes to higher-income households. The Tax Policy Center found that six of every ten dollars in the new breaks will flow to the top 20% of earners (those making over ~$217 000). And, there’s more: a newly indexed $6,000 deduction for seniors over age 65 is expected to provide up to $9.3 billion in savings next year.

Which headline this week most interests you?

Feature Image Credit: David Sucsy/DSZC/Getty Images

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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