It’s right there in plain sight for residents of the Motor City who got a property tax bill this summer. The Detroit Public School district has had to pay so much money for lawsuits against the district over the past year that officials there put a special “judgment tax levy” on the most recent property tax bill. Read about it in the Detroit Free Press here.
Now, I’ve been talking about the hidden lawsuit tax for years, but this action by the Detroit schools underscores the fact that we all pay for lawsuits, even if we’re never directly sued. Sure, the lawsuit tax isn’t a line most of us have seen on the receipts we’ve received when purchasing goods and services, but that is beginning to change.
Cities across the country are reporting record payouts for lawsuits, and with budgets getting squeezed, experts believe special lawsuit taxes may spread if the problem of lawsuit abuse isn’t addressed. Local governments aren’t the only ones beginning to pass on the cost of lawsuits, either.
In an earlier post on this blog, I revealed that the hugely popular City Museum in St. Louis has added a charge to its tickets to pay for lawsuits against the museum. Start adding up all of these special taxes and surcharges, and it’s easy to see how the Pacific Research Institute came up with a “tort tax” of nearly $2,000 that is imposed on every man, woman and child in the United States each year.
Whether it’s called a lawsuit tax, tort tax or judgment tax, no one wants to have to pay it. The only thing good about having these taxes now begin to appear on actual bills is that it will make everyone aware that we are all paying for the lawsuit epidemic happening in our country. Awareness of the problem is the first step toward fixing it.