TAX LEGISLATION AFTER THE ELECTION

Tax legislation after the election. While there are some votes still being counted there is enough certainty to provide at least an early bird take on taxes--in both the lame duck session and in the new Congress. That said, with control of the Senate dependent on the outcome of the two Georgia runoff elections on January 5th 2020--there are two distinct scenarios: 1) the Senate stays Republican, or 2) the Senate is tied with the Democrats winning both Georgia seats and the Vice President casting the deciding vote. Casting a significant shadow over all this is the surprising results in the House--where the republicans won a number of seats and reduced the Democrat majority to a handful. Tax legislation after the election.

Leader McConnell, post-election, repeated his support for a coronavirus relief bill by the end of the year. Tax elements of such a bill would likely be; expansion of the PPP loan program (as well as clarification on treatment of forgiven PPP loans): an expanded employment retention credit: a credit to employers for Covid-related health and safety improvements--and possibly another round of checks. Spending elements would also include expanded/extension of federal unemployment benefits as well as funding for Covid-19 testing, tracing, healthcare, etc. The fights remain over the extent of state/local relief and also litigation protection for government, businesses, and tax exempt organizations.

If the Senate stays in Republican control--the major tax increases that were put forward by Vice President Biden in the campaign will be largely off the table. No increases in the ordinary income tax rate at the top: capital gains tax, corporate tax, social security payroll tax, estate taxes, no curtailment of Section 199A for small and medium businesses. So what is yes. Biden's proposals on green energy tax incentives, the family friendly tax incentives will get a hard look, and proposals to encourage domestic manufacturing will all get looked at. Also a renters credit and first time homebuyers.