Tax policy implications
The key tax policy issue that was implicitly on the ballot in the presidential race was the fate of President Trump’s signature 2017 tax code overhaul—known informally as the Tax Cuts and Jobs Act (TCJA, P.L. 115-97)—which, among other things, lowered the tax burden for many businesses, whether structured as corporations or passthrough entities, as well as for individuals, trusts, and estates. For budgetary and procedural reasons, the individual and passthrough provisions generally are scheduled to expire at the end of 2025, with certain other business tax changes phasing in or out even sooner.
The two candidates had laid out starkly different positions. Joe Biden the new President Elect campaigned on the premise that TCJA’s benefits are skewed to large corporations and more affluent individuals and he offered tax policy proposals aimed at addressing that perceived imbalance. Donald Trump, on the other hand, argued that TCJA’s temporary tax cuts were necessary to fuel economic growth and should be made permanent—and, in some cases, even expanded—to further boost the economy and provide additional certainty to taxpayers.
The outcome of the 2020 presidential contest will shape the overall direction of tax policy in the coming four years. But it is important to note that, generally, tax policy originates in Congress, not the White House, so any new tax laws enacted in a Biden administration will necessarily also carry the imprimatur of the legislative branch with its many competing interests and priorities. The final determination of party control in the House and Senate will give us a complete picture of who will likely be the key decision makers on tax policy in the next Congress, both at the leadership level and on the two congressional taxwriting committees, and this, in turn, will have a significant impact on the ability of the next administration to advance its tax agenda.
Deloitte Tax LLP will discuss in detail the outcome of the election results and their potential implications for tax policy during a webcast. You can register for the webcast via the link below:
Tuesday, 5.00pm CET | 1 hr
Participants will gain insights into the president-elect’s vision for tax policy and discover the potential impact of his proposals on businesses and individuals.
If you would like to discuss more on this topic, please do reach out to our key contacts below.