A Bad Tax Break for Foreign Lawsuit Funders

David Malpass, former president of the World Bank, and James Carter, former deputy assistant secretary of the US Treasury, argue that Congress should close a “tax loophole” allowing foreign litigation funders to treat lawsuit proceeds as capital gains, endorsing the proposed Tackling Predatory Litigation Funding Act, which would subject funders’ profits to ordinary income tax rates and impose withholding requirements.

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