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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: Brumar89 who wrote (59742)	7/29/2009 9:11:30 PM
From: koan	Read Replies (1) \| Respond to of 149317

Obama got 78% of the most highly educated districs in the country and McCain got 88% of the least educated districts. What does that tell you??

To: Brumar89 who wrote (59742)	7/31/2009 8:30:01 PM
From: Brumar89	Respond to of 149317

A Tax Break for Trial Lawyers? Lawyers/law firms donated $126M in the last election cycle - 78% to Democrats. And now they're fixing to pay them back with a healthy return with a tax break for trial lawyers - price tag $1.6B. Nice profit margin on those contributions. Walter Olson notes that some folks in Congress are pushing a tax break for trial lawyers. Specifically, the proposal would enable plaintiffs' lawyers to deduct loans to clients to cover litigation expenses as made, rather than at the conclusion of the litigation. The estimated value of the tax code revision is $1.6 billion. Yet Victor Schwartz (among other things general counsel of the American Tort Reform Association) and Christopher Appel argue the revision could have broader implications: Those who practice plaintiffs’ lawyer work learn quickly that it is a business similar to other capital businesses. Capital is placed at risk and a judgment is made whether or not it will bring a profit. Today the costs of litigation act as a curb against marginal and frivolous litigation. This is what makes the plaintiffs’ lawyers’ tax proposal of such great practical importance. While one cannot calculate it mathematically, having the federal government bear 40% of the initial costs allows plaintiff’s attorneys to take more cases with higher risks. The result to industries targeted by plaintiffs’ lawyers will be staggering. Schwartz and Appel also challenge the argument that this reform would simply treat plaintiffs' attorneys' business expenses like those of other small businesses. volokh.com "AAJ looking to quietly pass plaintiff lawyer tax break" Another eye-opening story from Chris Rizo at the Chamber's Legal NewsLine: the litigation lobby is quietly preparing to push through a $1.6 billion (with a "b") tax break for contingent-fee lawyers that would let them deduct expenses as made, rather than in the year of settling a suit. AAJ lobbyist Linda Lipsen says Sens. Harry Reid and Max Baucus and Reps. Nancy Pelosi and Charles Rangel are among those on board, as well as "some Republicans", but "the problem is there is not a tax vehicle yet," -- "You cannot have a stand alone bill to help lawyers ... so we have to tuck it into something." More: Carter at ShopFloor has the bill numbers -- S. 437, with GOP co-sponsors Crapo, Martinez, and Graham, and H.R. 2519 -- and also links to a Victor Schwartz/Chris Appel paper (PDF) for the Washington Legal Foundation. And welcome readers from Jonathan Adler's post at Volokh Conspiracy, which has spurred a considerable discussion in comments of what tax treatment for these outlays would in fact accord with the tax principles applied to other economic activity. Says one commenter: Treating these pseudo-loans as business expenses the moment they're made is effectively an admission that the lawyer doesn't expect to be repaid. If a bank loans you $1 million to buy a house, you don't see them lobbying to make it a tax-deductible business expense, because it's a bona fide loan they expect to get back. [Addressing another commenter:] ... the fact that the loans are tax-deductible if they are not repaid is not indicative of some special tax treatment that already exists; it simply means that they can be written off like any bad debt. But you don't get to write off bad debt until you actually know it's bad! Yet more: Tax Lawyer's Blog ("'Tuck it into something' is an Orwellian phrase designed to mislead the public. What it means is that certain congressmen want to pass this law to placate the trial lawyer lobby, but they don't want the electorate to know they're doing it."); Paul Caron, TaxProf (collecting links). Posted by Walter Olson pointoflaw.com Lobbyist: AAJ looking to quietly pass plaintiff lawyer tax break BY CHRIS RIZO SAN FRANCISCO (L Legal Newsline)- Federal legislation that would afford trial lawyers a special tax break faces an uncertain future, says one of the chief lobbyists for the nation's trial lawyers. The proposal would allow attorneys to deduct fees and expenses up-front for filing contingency-fee lawsuits. The proposal amounts to about a $1.6 billion tax break for plaintiffs' attorneys, estimates indicate. "Everyone wants to do it, but the problem is there is not a tax vehicle yet," said Linda Lipsen, American Association for Justice (AAJ) Senior Vice President of Public Affairs. Lipsen was speaking to the Birth Trauma Litigation Group at the annual meeting this week of the AAJ, the trial lawyers' trade group. "You cannot have a stand alone bill to help lawyers … so we have to tuck it into something," she said. Currently, the expenses are considered loans to clients that are to be repaid from ultimate awards if they win or deducted on their income filings in the event of a loss. Lipsen said that it is "unfair" that trial lawyers are unable to deduct costs connected to their cases in the year that those costs are accrued. "No other business in America has to do it like this," she said. Lipsen said the AAJ is working to "fix this," noting that association has the support of Senate Majority Leader Harry Reid, D-Nev., Senate Finance Committee Chairman Max Baucus, D-Mont., and House Speaker Nancy Pelosi, D-Calif., and House Ways and Means Chairman Charles Rangel, D-N.Y. If these guys are for it, its gonna happen. All they have to do is decade what bill to hide it in. The problem is there is not a politically palatable vehicle to carry the legislation, Lipsen said. Another challenge facing the legislation is its cost, Lipsen acknowledged, noting that Congressional rules require that any tax break be paid for by new revenues. "The problem for us, unfortunately, is there is no money," she said. "It costs a couple billion… so we're going to have to find what they call a 'pay-for' so that we can make it budget neutral and get it passed. This is going to be tough because there is no money." Even so, she said senior congressional officials want to press forward with the legislation. "Right now all these senior Democrats and some Republicans are saying, 'Let's do it,' so again let's cross our fingers," Lipsen said. Critics say the tax break to offset the cost of filing high-dollar lawsuits would act as an incentive to file more lawsuits, particulary class actions, because attorneys could write off the up-front costs to pursue them. From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com. legalnewsline.com