Should Recovery for Intangible Losses from a Personal Injury be Taxed?

Scott Smith

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If you were injured due to someone or some company's careless or negligent acts should you be taxed if you recover for your losses? The business elite think so.

McQuillan & Abramyan's "The Tort Tax" (WSJ, March 27, 2007) concludes that each American family is expending an annual "tort tax" of $9,827. This "tax" is comprised of what the authors claim are "static" and "dynamic" costs. The majority of the alleged static costs consists of jury awards based upon testimony and arguments from both sides in a jury trial and render a verdict against the at fault party. To suggest that such awards are an unnecessary or inconvenient "tax" on American families is not only misleading but a blatant falsehood. The authors infer persons tragically injured by another's carelessness must silently suffer the consequences with no recompense. Juries possess no power to restore the use of injured persons legs or to return sight to blind eyes. Our justice system can only compensate such persons with money. In actuality, our system of justice was formed upon the basic premise of freedom and those who cause harm to be personally responsible for the harm caused. This is how insurance companies were created, to insure companies and individuals from their mistakes that cause harm to others. Insurance companies have again overreached in an attempt to increase even more their billions in profit.

For example, if a drunk driver takes the life of a person, our laws view him as having incurred a debt to the deceased's family that he (or likely his insurer) is obliged to pay. This obligation is no less important than one that might be created contractually, between two businesses but is constitutionally guaranteed. Ordinary citizens who request their day in court are often characterized as money grubbers, a "tax" on the system or looking for a handout. Insurance companies believe "losses" must be legislatively "reformed" by, e.g., imposing limits on the amount of money could be awarded by a jury. Meanwhile, businesses charge the courts retaining full rights to sue each other or individuals with impugnity.