Biden push for $2.5B tax break for lawyers spurs accusations of political payoff

From Washington Times.com (Nov. 23, 2021):

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 tax break allows trial lawyers working on a contingency basis, meaning they are paid only if a case is settled in their favor, to deduct expenses immediately. Such expenses include hourly labor fees and the expenses associated with waging a lawsuit, such as filing and deposition costs.

On average, according to the American Bar Association, the fixed rate for contingency cases is anywhere between 33% and 40% of the total settlement payout. In some instances, the contingency fee can range upward of 50%.

Given that legal costs have soared in recent years, the Joint Committee on Taxation estimates the write-off would cost taxpayers $2.5 billion over the next decade.

Republican lawmakers argue the lucrative write-off is nothing more than a giveaway to the trial lawyers lobby, which heavily underwrote Mr. Biden’s presidential bid.

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.” [read more]

It is a giveaway. One hand scratching the back of another.