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It is no secret that the doctrine of punitive damages has had a storied past in American jurisprudence, yet it has remained an integral part of both federal and state courts throughout the country. Most, if not all, attempts to restrict punitive damage awards have failed due to the over-inclusive or under-inclusive nature of the remedial measures; however, split-recovery statutes—another punitive damage regulatory tool—have been touted as striking a proper balance between limiting plaintiff windfalls while still punishing and deterring defendants. Even so, such statutes have been meet with vigorous constitutional criticism and fail to curtail punitive damage awards for federal law claims. This Article argues that, while the Ninth Circuit’s ruling in Engquist v. Oregon Department of Agriculture provided the necessary constitutional approval for split-recovery statutes, because the statues can be easily circumvented by post-verdict settlement, the federal government should elect to expand the existing federal tax on punitive damages so that punitive damages may once again serve as a societal benefit.