Inflation.
That inescapable, invisible robber, snatching up more and more of your hard-earned dollars and making it tougher to buy the things your family needs and wants.
Some blame it on supply chain issues. Some on societal, political and economic factors.
But there’s one major component of inflation that few have focused on, and unlike other factors, we can take steps to address it right here in the Lone Star State: the cost of litigation—also known as the Tort Tax.
Every two years, the Institute for Legal Reform releases a nationwide study analyzing the cost of America’s tort system—that is, how much litigation costs Americans through court costs, increased insurance premiums and lawsuit awards.
The study estimates that U.S. tort costs in 2022 (the most recent year data was available) equate to $4,207 per household. Texas households were worse off than the national average, on the hook for $4,594 due to the cost of litigation, up from $3,904 in 2020. But the bad news doesn’t stop there.
Between 2016 and 2022, tort costs at the national level rose an average of 7.1 percent per year—far faster than average annual inflation (3.4 percent) and average annual GDP growth (5.4 percent). You read that correctly—the cost of litigation grew at a faster rate than both national inflation and GDP.
Commercial liability grew at a faster rate than personal liability, meaning employers and job creators have borne the brunt of those costs—a major reason why TLR helped form the Lone Star Economic Alliance to advocate for much-needed, common-sense lawsuit reforms in 2025.
Because it always helps to have a little context, here are just a few things Texans could buy with that extra $4,594:
- 998 breakfast tacos from Juan in a Million
- 499 #1 Combos from Whataburger
- 1,794 gallons of gas @ $2.56 a gallon
- Three months’ rent for a two-bedroom apartment in Houston
- Two tickets directly behind the Dallas Mavericks bench when they play the Minnesota Timberwolves on Christmas Day
- 531 half-gallons of Blue Bell Ice Cream
- 436 six-packs of Shiner Bock
It’s clear the status quo in litigation has become unsustainable for families and job creators alike. Without action from the Texas Legislature next session, we can continue to expect the Tort Tax to drain Texans’ pocketbooks and create a serious drag on our economy.
