March 29, 2006 6:21 AM

Lesson #1: NEVER get between a lawyer and his money

Lobbyist for lawyers: ‘Tax us, but … ‘

Earlier this month, [Vinson & Elkins] announced it was hiking starting pay for baby lawyers to $135,000 a year. (Eat your hearts out, teachers.) A survey by Texas Lawyer last year put the average pay for a partner in the largest 25 Texas law firms at $819,000 in 2004, up from $776,000 the year before.

Jeez, it’s gotta be tough being a lawyer in a high-powered, big name law firm these days. Every time you turn around, it seems like government is trying to rifle your wallet. Good God, how is a self-respecting attorney supposed to keep up the payments on his (or her) Mercedes S-class and pay for that closet full of Armani suits?

There’s a school of thought (to which I happen to subscribe) which holds that to those whom much is given much is expected. Now, don’t go interpreting that as my giving the OK to unreasonably taxing lawyers or other professionals. What I am saying is that there is certainly nothing wrong with expecting attorneys to give something back. In this case, the Sharp Commission isn’t even asking for much- a 1% tax on incomes over $300,000. If you make that kind of money and you can’t see your way clear to contributing to educating Texas’ future…well, let’s just say that someone’s checked their priorities at the door.

I walked over to the First City Tower, the downtown skyscraper that looks like it has a jagged crack down the front, and took the elevator up 19 floors to the elegant offices of Vinson & Elkins.

Then I threw a tough challenge at Glen Rosenbaum. Make me understand why rich lawyers object to being covered by a business tax the Sharp Commission is expected to propose.

Rosenbaum is a lawyer and a lobbyist, specializing in tax law.

He is a man with a reputation. Both liberal and conservative legislators hold him up as the good kind of lobbyist.

He doesn’t feed them free at his swank restaurant, let them use his skybox or take them on golfing trips to Scotland….

Rosenbaum is the point man for 18 of the state’s largest law firms that have banded together to fight certain expected proposals from the Sharp Commission.

One would effectively levy a 1 percent tax on the money earned by partners - above $300,000 a year.

That’s the one Rosenbaum’s group is fighting.

So, let me see if I have this straight. High-powered lawyers- who wouldn’t even have to worry about this tax until and unless their annual income exceeds $300,000- are upset at the prospect of their financial success being mininmally taxed in order to fund public education? Never mind that this tax will also help to finance a cut in their property taxes, which is Texas’ current primary method of funding public education. Uh, am I missing something here??

While 1 percent seems like a pittance, the firms are concerned that the Legislature would soon be under pressure to raise the rate. “With the business tax, a 1 percent raise would bring in $6 billion,” he said. “A 1 percent raise in the sales tax is $2.5 or $2.6 billion. So if you need to raise a billion dollars, you raise the business tax 0.2 percent.”

This, I suspect, is the real issue.

A couple of thousand per partner isn’t worth fighting over. But a percent here and a percent there and pretty soon we’re talking real money.

I can understand the argument, and there is some merit to it. A tax, once enacted, is likely permanent and always at risk of being increased. After all, if 1% is good, isn’t 1.5% better? How about 2%? Or 3%? Combine this with the reality that almost no one is going to have a philosophical problem with taxing rich lawyers, and you can see where this worst-case scenario is headed. It’s not difficult, though, to write legislation that caps this tax at a certain level, is it? Especially since lawyers are likely to be the ones writing the legislation.

I don’t pretend to understand all the issues involved here, because I don’t spend a lot of time fretting over the financial well-being of Houston’s lawyers. Y’all make a s—tload more money than I do, so worry about your own damn self. And when it comes time to contribute, remember this little truism- to whom much is given, much is expected. Now quite your whining….

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This page contains a single entry by Jack Cluth published on March 29, 2006 6:21 AM.

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