Tax policy direction may change with Biden win but Senate control remains key question for future legislation

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November 2020

Overview

Updated 2020 federal election results show that Democratic presidential candidate Joe Biden is projected to have won the race for the White House, but control of the Senate may not be decided until January 2021 when run-off elections are expected to be held for two Georgia Senate races.

Based on updated ballot counts in Pennsylvania and Nevada, Biden has now secured more than the required 270 electoral college votes needed to win the race. The Associated Press is reporting Biden to have won 290 electoral college votes against 214 for Republican incumbent President Donald Trump. Biden also is leading in Georgia, while Trump is leading in Alaska and North Carolina. At the same time, the election results have not yet been certified by state authorities and Trump campaign officials have signaled that they intend to contest the election results.

Control of the Senate remains in question. Republicans are currently projected to have secured at least 50 seats in the new 117th Congress (assuming they hold the Alaska and North Carolina seats where Republicans are currently leading), and Democrats are projected to hold 48 seats. The contests for the two Georgia Senate seats currently held by Republicans appear to be headed to January 5, 2021 run-offs, since no candidate has received an outright majority of votes cast in the two contests.

Democrats could gain control of the Senate if their candidates were to win the two Georgia Senate run-off elections, since a Vice President Kamala Harris would be able to provide the tie-breaking vote in a 50-50 divided Senate. Democrats are set to retain control of the House, although Republicans did make unexpected gains in that chamber.

Meanwhile, Senate Majority Leader Mitch McConnell (R-KY) on November 4 called for action on a COVID-19 economic relief package during the coming lame-duck session of the current Congress. The House and Senate also need to act on legislation to fund the federal government beyond December 11, when a temporary spending measure expires.

The takeaway

The results of the 2020 elections for control of the White House and Congress will have a significant impact on the direction of tax policy over the next four years. Businesses and individuals will want to examine the potential impact of proposed tax changes and should be prepared to engage with policymakers when legislation is considered.

Additional material

For a PwC Insight on individual tax considerations for the 2020 elections, click here

For a PwC Insight on business tax considerations for the 2020 elections, click here.

For more PwC road to election 2020 analysis, click here.

Contact us

Rohit Kumar

Washington National Tax Services Co-Leader, PwC US

Pat Brown

Washington National Tax Services Co-Leader, PwC US

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