A special tax break that would let contingency-fee lawyers write off loans they make to their clients has attracted plenty of unwanted attention in the U.S. Senate, Legal Newsline reports:
One-quarter of the U.S. Senate has expressed concern that the U.S. Department of the Treasury may be planning to issue an order giving trial lawyers tax breaks on contingency fee lawsuits.
Following a letter from Sen. Chuck Grassley, R-Iowa, 24 more senators wrote the Treasury department Thursday to express similar worries about a tax break that failed the past two years in Congress. John Thune, R-S.D., authored the letter, sent to Treasury Secretary Timothy Geithner…
“From health care legislation to the recently-passed financial regulatosry reform, Americans have witnessed this Administration and Congressional Democrat leadership cut deals with special interest groups,” Thune said. “Instead of providing tax relief for political allies, we ought to be providing across the board tax relief for the average, hardworking taxpayer.”
Sources at an American Association of Justice convention last month in Vancouver, Canada, told Legal Newsline that John Bowman, the Director of Federal Relations for the AAJ, said an order from the Treasury could come soon. He said this in response to a question from a state delegate regarding recruiting new members…
“We believe that this targeted tax break will do nothing to spur economic growth or job creation. Instead, it would only further provide incentives for contingency fee lawsuits which raise prices for consumers and decrease employment,” Thune’s letter says.
The tax break, which is worth $1.6 billion, is something to watch for in the post-election policy frenzy sure to occur if Democrats lose big in this fall’s election. Trial lawyers are counted among the biggest and most faithful Democratic Party donors.