Thom Tillis tax could undercut conservative fight against federal overreach
by Cathie Adams · The Washington TimesOPINION:
As soon as he announced his pending retirement, Sen. Thom Tillis, North Carolina Republican, dropped all pretense of supporting President Trump’s agenda.
Mr. Tillis has spent the past year voting against Mr. Trump’s tax cuts, blocking the president’s nominations and working to slow the deportation of illegal aliens.
Now, in his final months in the Senate, Mr. Tillis is turning his fire not just against the president but also against grassroots conservative activists.
He is reportedly trying to jam a provision into Republicans’ must-pass budget reconciliation bill, which would fund U.S. Immigration and Customs Enforcement and the Border Patrol without compromising on the president’s mass deportation pledge.
The provision would effectively dry up a funding source that conservative nonprofits rely on to fight government overreach and defend constitutional rights.
For the nonprofit advocacy groups that defend religious liberty and free speech and challenge unlawful regulations, suing government agencies takes lawyers, time and, above all, money. Often, the nonprofits do not have the funds to see these lawsuits through to their conclusions, so they frequently seek what is known as “third-party litigation funding.”
Think of it as venture capital for lawsuits. Outside investors help finance a case in exchange for a share of the award or settlement if the plaintiff wins. If the company or nonprofit bringing the lawsuit loses, then the investors get nothing.
It is a market-based answer to a basic problem. Litigation is expensive, and without access to capital, even the most meritorious lawsuits may never reach a courtroom.
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Mr. Tillis’ desired legislation would not ban this third-party litigation funding outright, at least not in theory. Still, it would impose such heavy taxes and onerous disclosure requirements that few, if any, investors would be willing to back these lawsuits.
Many conservative groups’ most important legal fights depend on a broad support network of donors, nonprofits and funding mechanisms willing to sustain long, complex cases. Those cases often have dragged on for years, especially when the Biden or Obama administration was on the other side, with virtually unlimited resources.
Consider a small business trying to challenge a costly federal regulation, say, an Environmental Protection Agency rule that threatens to shut down its operations. Taking that fight to court could require years and tens of millions of dollars. Without outside funding, that business may never be able to bring the case, leaving the regulation in place by default.
Any serious attempt to clamp down on litigation funding — whether through taxes, disclosure mandates or both — will almost certainly shrink the pool of available capital. Investors will be less likely to back politically sensitive cases if doing so exposes them to public harassment, reputational attacks or retaliation.
Fewer investors mean fewer cases. Fewer cases mean fewer unlawful policies challenged and fewer bad precedents overturned.
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Conservatives have long argued, rightly, that the courts are among the last effective checks on government overreach. Yet that principle means little if ordinary Americans and aligned organizations lack the resources to bring cases in the first place.
If lawmakers hollow out the financial tools that enable litigation, then they weaken the rule of law.
The people who will feel the consequences are the very people Republicans claim to represent: small businesses crushed by overregulation, parents challenging unlawful school policies and religious organizations defending their First Amendment rights.
Without outside financial support, many of them will have no realistic path to the courtroom. Progressive advocacy groups and government agencies win by default.
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Conservatives cannot fight government overreach while cutting off the means to challenge it. They cannot defend constitutional rights while making those rights harder to enforce. They cannot win legal battles that are never started in the first place.
Mr. Tillis seems determined to sabotage conservative causes during his final months in the Senate, but there is no reason other Republicans should join him.
• Cathie Adams is the first vice president of the Eagle Forum. She is a former chairman of the Republican Party of Texas and former president of Texas Eagle Forum.