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Tuesday, March 25, 2008

California Considers Taxing Workers' Compensation Attorneys Fees

If Governor Arnold Schwarzenegger has his way the battered advocacy system for injured workers in California is about to get hit again. The Governor recently proposed charging a sales tax on professional fees in the State of California. He indicated that he is well aware of the loopholes in the present system and would like to end them in order to recover money for California sagging state revenues.

Charging a “sales tax” for professional fees is a concept that the Social Security system has imposed for several years by charging a user fee (6.3%) to successful attorneys who receive favorable awards for their clients before that agency. In fact, the concept of Social Security charging a fee to have Medicare review proposed settlements has often been rumored as they are analogous to IRS private opinions.

While no definite proposal has been offered to the California legislation, the Governor will obviously need to reach into someone’s bank account to keep California’s budget afloat.

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