Press Release

April 15, 2009 - ‘HIDDEN LAWSUIT TAX’ ADDS TO ILLINOIS’ ALREADY HEAVY TAX BURDEN

On ‘Tax Day,’ I-LAW urges taxpayers not to forget all of the ‘hidden taxes’ they pay as a result of political corruption and lawsuit abuse

(Marion, IL) – As Illinois residents file their taxes, they do so with the knowledge that their state income taxes could increase by as much as 50 percent, but Illinois Lawsuit Abuse Watch (I-LAW) executive director Travis Akin says thanks to personal injury lawyers, income taxes are only part of the equation when it comes to the state’s tax burden.

“While Illinois residents are bracing themselves for massive tax increases, they need to understand that there is more to their overall tax burden than just what is in the tax code,” said I-LAW executive director Travis Akin. “There are ‘hidden taxes’ that cost us all dearly. The cost of political corruption is one ‘hidden tax’ and certainly the cost of lawsuit abuse is another. While the ‘lawsuit tax’ may be hidden, it does have a very real impact on family budgets.”

A recent news story highlights how the cost of political corruption is essentially a "hidden tax" on Illinois families because taxpayers ultimately end up paying more for less than adequate government services. Another "hidden tax" is the extra cost we all pay for lawsuit abuse. According to research from Towers Perrin, every man, woman and child in the country pays a "lawsuit tax" of $835 per year, which for a family of four is nearly $3,500 per year.

“Personal injury lawyers from outside our state target area business to sue because these out-of-state lawyers know that our courts are notoriously friendly to questionable lawsuits,” Akin said. “The cost of fighting these abusive lawsuits forces already burdened businesses to lay off employees and pass on a lawsuit tax to consumers. Every time we make a purchase, the cost of litigation is built into the price of that item. It is essentially a ‘hidden tax’ and unfortunately personal injury lawyers do not offer any refunds or rebates.”

Akin pointed out that Illinois has the 11th highest property taxes in the country. In Chicago, residents pay a whopping 10.25 percent sales tax – the highest of any major city. Illinois residents also pay taxes on motor fuel and even pay sales tax on top of the motor fuel taxes, which is essentially a tax on a tax. Now, lawmakers are considering raising the income tax.

“The ‘Land of Lincoln’ has now become the land of political corruption, high taxes, widespread unemployment and excessive litigation and it is costing us dearly,” Akin said. “With tea parties happening in Chicago and all across the country today, Illinois residents should not only remember all of the obvious taxes we pay, but also the ‘hidden’ ones as well. It is time we took a stand against the personal injury lawyers and their harmful agenda.”

According to a report from the respected Harris polling company, Illinois is ranked 46th out of 50 states for judicial fairness. Akin said the lack of fairness in our courts not only continues to add to our overall tax burden, but it also makes it difficult to grow the economy and increase the state’s tax base.

“Companies look to create jobs where the legal system is fair,” Akin said. “Without the ability to attract new businesses, Illinois’ economy cannot grow, which means fewer jobs and opportunities. It also means Illinois’ growing tax burden will be shared by fewer people.”

Akin said lawmakers can improve Illinois’ legal climate by enacting some much-needed legal reforms. Two bills to watch are SB 1963 and SB 1965. Akin said SB 1963 would establish some stricter guidelines on where a lawsuit can be filed in Illinois. Senate Bill 1965 would put into law some requirements on expert witness testimony in civil cases such as qualifications, testimony, disclosure, and compensation of expert witnesses and basis of expert opinion testimony for anyone testifying as an expert witness in civil cases. The deadline for both of these measures has been extended, which means the Legislature can still act on them this session.

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