Referred to the House Committee on Ways and Means.
This bill creates a new tax regime targeting third-party litigation financing. It defines covered litigation financing agreements and "qualified litigation proceeds," taxes covered parties at a rate equal to the highest individual tax rate plus 3.8 percentage points, and imposes withholding on payments to funders.
Progressives stress access-to-justice harms from reduced funding.
Relative to its intended legislative type, this bill constructs a substantive tax measure with detailed definitions and withholding mechanics but leaves significant administrative and fiscal implementation details missing and contains drafting inconsistencies that could undermine the stated tax scheme.
This bill creates a new tax regime targeting third-party litigation financing.
It defines covered litigation financing agreements and "qualified litigation proceeds," taxes covered parties at a rate equal to the highest individual tax rate plus 3.8 percentage points, and imposes withholding on payments to funders.
The bill removes certain litigation-financing proceeds from capital-asset treatment, excludes those proceeds from general gross-income treatment (so the new chapter governs taxation), and includes exceptions for small or loan-like funding arrangements.
Narrow but ideologically salient and legally complex; creates new targeted tax and enforcement burdens, limiting bipartisan appeal and increasing litigation risk.
Relative to its intended legislative type, this bill constructs a substantive tax measure with detailed definitions and withholding mechanics but leaves significant administrative and fiscal implementation details missing and contains drafting inconsistencies that could undermine the stated tax scheme.
Progressives stress access-to-justice harms from reduced funding.
These are examples from the analysis, not a ranked list of the most-affected groups.
Progressives stress access-to-justice harms from reduced funding.
Skeptical of the bill’s effects on access to civil justice despite concerns about exploitative funders.
Worries the high tax and withholding could discourage litigation funding that helps low-income plaintiffs pursue meritorious claims.
May support targeting truly predatory foreign funds but seeks protections for consumer and civil-rights litigation funding.
Cautiously open to addressing problematic litigation funding but concerned about implementation and unintended consequences.
Views the bill as a heavy-handed federal tax tool that may need clearer scope, administrative rules, and safeguards to preserve access to legitimate funding.
Would seek technical fixes and narrow tailoring before full support.
Generally favorable toward measures that deter litigation abuse and limit foreign influence in U.S. lawsuits.
Views a high, targeted tax and withholding as useful disincentives against predatory financiers, while appreciating exceptions for loan-like arrangements.
However, some conservatives may object to new federal tax complexity and prefer state-based reforms.
Reached or meaningfully advanced
Reached or meaningfully advanced
Still ahead
Still ahead
Still ahead
Narrow but ideologically salient and legally complex; creates new targeted tax and enforcement burdens, limiting bipartisan appeal and increasing litigation risk.
The bill has not accumulated any surfaced votes yet.
Progressives stress access-to-justice harms from reduced funding.
Narrow but ideologically salient and legally complex; creates new targeted tax and enforcement burdens, limiting bipartisan appeal and incr…
Relative to its intended legislative type, this bill constructs a substantive tax measure with detailed definitions and withholding mechanics but leaves significant administrative and fiscal implementation details missi…
Go beyond the headline summary with full stakeholder mapping, legislative design analysis, passage barriers, and lens-by-lens tradeoff breakdowns.