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TaxBuzz Top 5 - LA Mayor Pulls Bid to Rewrite Mansion Tax, Rare Bipartisan Push to Extend Obamacare & More

TaxBuzz Top 5 - LA Mayor Pulls Bid to Rewrite Mansion Tax, Rare Bipartisan Push to Extend Obamacare & 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. Los Angeles Mayor Karen Bass Pulls Bid to Rewrite Mansion Tax

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Credit: Mario Tama/Getty Images

Los Angeles Mayor Karen Bass has shelved her last-minute attempt to overhaul the city’s “mansion tax,” a voter-approved levy on property sales above $5.3 million. The bill, the LA Times reports, was drafted with Sacramento lawmakers, and would have reduced taxes on sales of newly built apartment complexes, shopping centers, and warehouses. Bass pulled it hours before its first Assembly committee vote, saying the proposal needed “additional amendments and further technical changes” and would be reintroduced in January.

Backers of the measure argued it would fix “unintended consequences” of Measure ULA, claiming higher transfer taxes slowed housing production. Critics, however, said other economic factors—like interest rates—are driving the slowdown. United to House LA, the coalition that championed Measure ULA in 2022, blasted the bill as an “end-run around voters,” warning proposed cuts could slash tax proceeds by up to 30% and jeopardize funds for homelessness prevention.

Independent analysis suggests the slowdown in transactions is less about interest rates and more directly tied to ULA itself. After the tax took effect, sales of parcels with high redevelopment potential dropped by half, while multifamily, commercial, and industrial property transactions fell 30–50% compared to neighboring cities not subject to the tax. This decline in turnover has an unexpected consequence: under Proposition 13’s reassessment rules, fewer high-value property sales mean slower growth in assessed values. Schools, the city, and the county are estimated to be losing roughly $25 million per year in property tax revenue as a result. Critics argue this undercuts the very services—education and local government—that rely on property tax revenue to thrive.

The political stakes extend beyond City Hall. Former Assembly Speaker Bob Hertzberg, who helped draft the bill, suggested the overhaul could also blunt support for a statewide ballot measure backed by the Howard Jarvis Taxpayers Association, which seeks to limit local tax hikes and repeal ULA altogether. Business groups, including the California Business Roundtable, said Bass’s plan didn’t go far enough to revive L.A.’s economy.

2. France’s Digital Services Tax Upheld by Court Despite Trump Criticism

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Credit: yann vernerie/Getty Images

Amid political strife in the nation, France’s constitutional court has upheld the country’s 3% digital services tax—a levy targeting big tech platforms generating revenue from digital activities—rejecting challenges that it violates the constitutional principle of equality. Lawyers for companies like Airbnb Inc. and Digital Classifieds France had argued such levies unfairly discriminated against foreign firms. 

Projected to bring in about €774 million (roughly $909 million) in 2025, the tax has been a target of sharp criticism from U.S. tech companies and from President Trump, who has labeled such measures discriminatory. He has threatened retaliatory tariffs against countries imposing digital service taxes that he believes harm American tech firms.

This ruling matters well beyond France. As Bloomberg notes, it strengthens momentum for similar digital service taxes in other countries and could affect global trade policy. Companies affected will have to absorb the tax or adjust their business models. For American tech firms, this court backing increases pressure on Washington to respond, via trade negotiations or potential tariffs.

3. Bipartisan Push to Extend Obamacare Tax Credits Ahead of Potential Shutdown

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Credit: YinYang/Getty Images

With the U.S. facing a possible government shutdown at the end of September, lawmakers from both parties are rallying together in a rare bipartisan push to extend expiring tax credits under the Affordable Care Act (ACA), colloquially referred to as "Obamacare". These credits, expanded during the COVID-19 pandemic in 2022, help lower the cost of health insurance premiums on ACA marketplace plans. If Congress does not act, Reuters says, premiums could increase by about 18% in 2026, affecting more than 24 million Americans who rely on these subsidies. 

Leading the charge are Republican Rep. Jen Kiggans and 11 other GOP members, who are calling for a one-year extension of the credits, citing the financial burden this would place on families. Democrats—including Senate leaders like Chuck Schumer and Tammy Baldwin—are also pushing for the extension in upcoming funding legislation. Despite cost concerns—estimated at roughly $380 billion—the growing political pressure is stemming from the popularity of the credits with voters, especially ahead of the 2026 midterm elections.

Without action, the ACA marketplace participants face higher premiums just as open enrollment begins. Some Republicans remain hesitant over the fiscal cost, but supporters argue the credits are too important to let lapse. The expiring subsidies have become a rare issue that’s drawing bipartisan cooperation amid other contentious budget fights. 

4. IRS, Federal Prosecutors Target High-Profile Fraud in Southern California

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Credit: gorodenkoff/Getty Images

Federal authorities are sharpening their focus on financial crime, with two Southern California cases this week highlighting the crackdown.

In Los Angeles, film accountant Joshua Mandel pleaded not guilty to charges of embezzling nearly $2 million from production companies through shell accounts, prepaid debit cards, and unauthorized transfers. Prosecutors allege Mandel funneled client funds into personal luxury expenses, from Las Vegas trips to online payments, while masking the activity under his company, First J Productions Inc. His trial is scheduled for November 4, 2025. 

Meanwhile, in Orange County, Aspiration Partners co-founder Joe Sanberg faces arraignment in a $248 million fraud scheme tied to falsified loan documents and inflated asset claims. Sanberg, alongside investor Ibrahim AlHusseini, allegedly misled lenders by pledging Aspiration stock as collateral and fabricating revenue streams. He is expected to plead guilty on September 15, with each count of wire fraud carrying up to 20 years. 

5. Ultra-Rich Pay Lower Effective Tax Rates Than Average U.S. Taxpayers, Study Finds

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Credit: Chip Somodevilla/Getty Images

A new working paper from UC Berkeley reveals that America’s ultra-high-net-worth individuals—the top 400 wealthiest like Mark Zuckerberg, Jeff Bezos, and Elon Musk—now pay lower effective tax rates than the typical U.S. taxpayer. The paper, titled “How Much Tax Do U.S. Billionaires Pay? Evidence from Administrative Data”, was conducted by economists Emmanuel Saez, Danny Yagan, Gabriel Zucman, and PhD student Akcan S. Balkir.

According to the study, the top 0.0002 percent saw their average effective tax rate drop from about 30% (2010-2017) to roughly 23.8% during 2018-2020. In comparison, the average U.S. taxpayer over that same period paid an effective rate of about 30.2%.

The researchers point to two key reasons: many wealthy individuals shield more of their business and investment income from taxation, and what income they do report often benefits from lower tax rates (such as capital gains rates versus ordinary wage rates) or from corporate tax reductions. The paper notes that overall corporate taxes paid by the top 400 dropped by about one-third between 2014-2017 and 2018-2020, in part due to the 2017 corporate tax cut.

For policy watchers, these findings add weight to debates over fairness in tax law, proposals for wealth taxes, and calls to reform how different income types are taxed.

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