Post-Election Analysis 2020: Tax

Key Takeaways

• Divided control of the legislative and executive branches will allow for only limited changes in tax policy in the 117th Congress. We expect the president-elect to propose the tax policy changes he campaigned on to support his ambitious agenda, but the Republican majority in the Senate likely will block these proposals.
• A less ambitious set of tax measures may pass a Republican Senate as part of an economic stimulus effort, likely confined to tax incentives, rather than the rate increases proposed during the president-elect's campaign.
• Tax measures were woven throughout President-elect Biden's campaign agenda, either to offset the cost of related policy initiatives or to provide incentives for private sector action, such as additional tax subsidies for investments in renewable energy, energy efficiency, and electric vehicles.