Democrats have tucked a lucrative $2.5 billion tax break inside President Biden’s multitrillion-dollar social welfare bill that would benefit the trial lawyers lobby, spurring Republican accusations of political backscratching, The Washington Times reports.
Uh, ya think?
The $2.5 billion tax break allows trial lawyers working on a contingency basis to deduct expenses immediately. That’s a lot of money and it’s a corrupting influence. They can beef up hourly fees and all expenses, including filings and the printers used to copy them.
The fixed rate in contingency cases is 33% to over 50%, The Times writes. That means the write-off will cost taxpayers over $2.5 billion in the next ten years. [Probably more as fees go up since we’re paying. Can’t you see them taking more and more worthless cases?]
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Trial lawyers contribute heavily to Democrats and to Biden. This is their reward.
The Times reports that donors from the legal sector gave more than $274 million to Democrats in 2020, according to the Center for Responsive Politics.
“Trial lawyers donated tens of millions to Joe Biden’s campaign,” said Sen. Tom Cotton, Arkansas Republican. “And now, Biden’s reckless spending plan includes a $2.5 billion tax break for trial lawyers, what a coincidence.”
Not only would trial lawyers be able to deduct expenses from contingency cases immediately, but they also would be allowed to do so even if there is the “possibility that such amount[s] will be repaid” after trial.
What’s more, Mr. Biden’s bill stipulates that income trial lawyers derive from contingency cases “shall not be reduced” by the write-off.
Currently, the IRS treats contingency expenses as nondeductible loans because of the likelihood they would be repaid if a case is won. In instances where a case is lost, the IRS allows trial lawyers to write off the expenses like a bad loan.
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