Bessent Targets 0% Tax on Foreign-Funded US Lawsuits, Urges Congress to Close Loophole
Updated
Updated · Fox News · Nov 9
Bessent Targets 0% Tax on Foreign-Funded US Lawsuits, Urges Congress to Close Loophole
1 articles · Updated · Fox News · Nov 9
Summary
Scott Bessent said foreign investors backing U.S. lawsuits can collect winnings at a 0% U.S. tax rate, while American plaintiffs often pay higher ordinary income rates.
The Treasury secretary called the practice a "malignancy" because overseas sovereign wealth funds and hedge funds can finance litigation, take a prearranged share of awards and claim capital-gains treatment or no U.S. tax at all.
Bessent argued the structure drains money from the U.S. economy, raises costs for businesses and consumers, and encourages more litigation rather than productive investment.
Congress has at least five more weeks in session this year, and Bessent's allies say a reconciliation bill would be the clearest vehicle to shut the loophole; failing that, the White House could explore executive action.