Celebs dodged millions in L.A.’s ‘mansion tax.’ Meet the industry guarding their wealth

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Even celebrities known for their humanitarian crusades managed to sell their properties before the start of L.A.’s “mansion tax” that goes toward affordable housing and homelessness prevention.

For outsiders to L.A.’s extravagant real estate scene, the numbers didn’t quite add up. Many sellers chopped the price of their home so low, or tossed in so many luxury goodies, that it would’ve been cheaper to simply sell at the original price and pay the tax. And some whose houses sold before the law took effect have spent many millions more on charity than the amount they saved in avoiding the tax.

“The thing that makes rich people different from you and I is they have a whole industry focused on helping them minimize their taxes,” said Chuck Collins, senior scholar at the Institute for Policy Studies, a think tank based in Washington, D.C. Collins helped coin the term “wealth defense industry” with his 2021 book “The Wealth Hoarders: How Billionaires Spend Millions to Hide Trillions.” He said some of the best minds of this generation are working in the “wealth defense” space.

“Celebrities might be civically oriented people, but for advisors, tax avoidance is their bread and butter. It’s how they ensure their worth,” Collins said. “They can say: ‘I saved my client this many millions in taxes,’ and they wear that banner around their neck.”

 

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