A legal services tax places an additional burden on those already experiencing financial problems. Clients seeking legal advice on dissolution of marriage, bankruptcy, child support, debt collection and similar matters are those who can least afford to pay an additional charge. The tax is regressive in that citizens and small businesses would have a disproportionate burden for paying a legal services tax. As many of the larger businesses retain attorneys as staff, they could avoid the tax, while moderate-income taxpayers and smaller business entities would have to pay the tax. A legal services tax could be a tax on tax advice.
Many citizens seek advice from tax law specialists as a means of clarifying their tax obligations.
A tax on legal services, ironically, would impose an additional tax on those who are looking for ways to reduce their tax burden. A key indicator of a state's economic climate is its tax structure. Passage of taxes on a wide range of services in other states, including legal services, in Florida and Massachusetts, has been a disaster. Boycotts and threats of business relocations led to repeal of the statutes in both states. Taxing a person's ability to defend himself or herself in a criminal proceeding could be challenged as unconstitutional.