Government to subsidize litigation

Most everyone is getting their taxes hiked by this administration, but trial lawyers are getting their own special tax cut:

After years of filling Democratic coffers with massive campaign donations, trial lawyers are cashing in their chips with a sweetheart deal from the government that will save the industry billions of dollars over the next few years.

According to a Legal Newsline report from the annual meeting of the American Association for Justice, the nation’s lobbying arm for trial lawyers, the industry may get a tax break from the U.S. Treasury Department that would give trial lawyers the ability to write off expenses involved in contingency fee cases much in the same way businesses write off expenses. But unlike businesses, lawyers will benefit from the tax write-off in addition to the fee they charge clients.

“They’re trying to get the best of both worlds,” said Christopher Appel, an attorney in the public policy group at the Washington-based law firm Shook, Hardy, and Bacon. “It’s not really a business expense. It’s a loan made to the other person the attorney fully expects to get back.”

Congress shot down a similar provision in 2009 that would have given trial lawyers a tax break on contingency fee lawsuits. An analysis of the bill at the time concluded that such a measure would ensure the government pays up to 40 percent of the costs involved in filing lawsuits. Now, it appears the group will get the tax break without having to go through the legislative process.

This is an outrageous payoff for reliable Democratic supporters. It’s terrible from a public policy standpoint too: Our society is too litigious already, we should be trying to encourage a reduction in litigation, not subsidizing it.

Also, the Treasury department can give trial lawyers a tax cut that Congress refused them? How does that work?

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