WASHINGTON, D.C.—Groups throughout the economy and across the country today joined the U.S. Chamber Institute for Legal Reform (ILR) in sending a letter to U.S. Treasury Secretary Timothy Geithner opposing a proposal to grant trial lawyers a special tax break. The proposed change in IRS tax policy – a perennial goal of plaintiffs’ lawyer advocates – would add nearly $1.6 billion to our national deficit over 10 years by allowing trial lawyers to deduct their up-front litigation expenses in contingency fee cases.
“At a time of high unemployment and record deficits, our government should be focused on helping businesses create jobs, not subsidizing frivolous lawsuits on the backs of taxpayers. Yet, this is exactly what this special tax cut would achieve,” said ILR President Lisa Rickard.
Seventy Six associations representing businesses large and small, state chambers of commerce, and national and local reform organizations argue that the proposed change in IRS tax policy would foster more questionable litigation. “Contingency fee lawyers, enticed by the ability to immediately deduct their reimbursable expenses, would be more willing to take on new, spurious and highly speculative cases,” states the letter.
A copy of the letter is available here: Coalition Letter to Treasury
Today’s broad coalition letter follows a September 1 letter sent by 90 national and state health care groups to the Treasury Department also opposing the tax cut. The letter expressed concerns that the proposed tax changes could increase the cost of health care by providing “financial incentive for trial attorneys to file less meritorious lawsuits against physicians and other health care providers.”
ILR seeks to promote civil justice reform through legislative, political, judicial, and educational activities at the national, state, and local levels.
The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.