Let's Put The "Litigation Tax" On Trial

By Glenn Hubbard

In a season of talk about tax cuts, there is a major one we could enact that would boost our prospects for economic growth without adding to the deficit. This reduction would also improve the fairness of the nation's tax burden. I'm talking about the "litigation tax" -- the tax on our economy from an inefficient tort system. Recently proposed federal legislation to reform class actions has been described as a battle between "trial lawyers" and "business." The truth is more complicated -- and troubling. Tort reform is about cutting the litigation tax, which is large and affects millions of us, not just a handful of corporate defendants. Indeed, businesspeople and consumers on both the Right and the Left have recognized the benefits of tort reform.