Editorial: Democrats slip lawyers a tax break
Well, Congress is concerned about somebody's taxes - rich trial lawyers.
As early as this coming week, Senate Democrats could try to bypass the usual committee process and rush to the floor a tax bill that contains, buried in textual obscurity, a payoff to the class-action plaintiffs' attorneys who contribute millions of dollars to their campaigns. The bill previously passed the House without the usual notice to the Treasury Department for an official analysis of its provisions. The rush to judgment in both chambers of Congress, otherwise known as cramming it down opponents' throats, is
objectionable. The trial-lawyer tax break is appalling. Together, they are an outrage.
The lawyers' payoff was slipped into a large bill with all sorts of other provisions such as extensions of a tax credit for research and development and of an optional deduction for individuals for their state sales tax payments. While those provisions would extend current law, the lawyers' payoff would change long-existing policy that already made good sense. At an estimated cost to the Treasury of $1.575 billion, the provision would
encourage class-action plaintiff lawyers to file dubious long-shot, big-money cases. It does so simply by letting the attorneys deduct fees and expenses up-front. Existing law rightly treats such expenses as loans to their clients, to be repaid from ultimate awards if they win or deducted on their income reports at case's end if they lose.
This attempt at special treatment for jackpot-justice attorneys comes just as the three most famous class-action practicioners – Mel Weiss, Bill Lerach and Dickie Scruggs - have been convicted of either bribery or kickback schemes. Also, just as states across the country have finally started to show measurable benefits from legal reforms aimed at reining in the most abusive class-action lawsuits, here comes Congress to encourage more of those suits instead of convening hearings to determine the true depth of corruption in the plaintiff's bar.
The good news is that Republican Senate Finance Committee member Michael Crapo of Idaho is promising "a partisan fight on the floor," and probably a filibuster. The bad news is that his objections are focused on procedural abuses and, bizarrely, on the Democrats' plans to find other savings to "offset" the cost of the bill. In short, nobody seems focused on the trial lawyer payoff. But it is that special-interest payoff by itself that merits a filibuster. If that provision remains in the bill, the whole thing deserves to be killed.
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