The 2020 election is almost . . . almost . . . almost over. That means, of course, it’s time to start jockeying for 2024! (Trust me, there are politicians who have already started. Sad, right?)
I’ve been naively following the polls for the last few months, and the polls told me to expect a Democratic White House, Democratic Senate, and Democratic House. (Should have learned my lesson in 2016, right? Fool me twice, shame on me.)
If those polls had been right, we’d be looking at Joe Biden taking action on his campaign pledges to raise top personal rates to 39.6%, raise corporate rates to 28%, raise rates on capital gains to 39.6% for taxpayers with AGI’s over $1 million, impose employment tax at the full 15.3% on earned income over $400,000, and make several more changes that would raise demand for our services through the roof. Say what you will about Biden’s overall platform, there’s no doubt that it would keep proactive tax planners busy for years.
As I write these words on Friday afternoon, just one news outlet has called the race for Biden. The rest are being conservative, in the non-political sense of the word, and waiting for more results from Pennsylvania before issuing a final call. But it’s clear that the Democrats have not flipped the Senate, at least not yet (and my Magic Eight Ball says not to count on Democrats winning two runoffs in Georgia to accomplish that feat).
So, unless Senate Majority Leader Mitch McConnell undergoes a complete philosophical transformation, we can count on four more years of the current code as amended by the TCJA. (Remember, most of those changes turn into a pumpkin like Cinderella’s carriage at midnight on December 31, 2025.)
What does that mean for our business? Well, the election may not augur significant change any time soon. But it does give us more certainty over the course of the next four years. There’s value in taking that certainty to our clients now, and it creates a sense of urgency to act now to take maximum advantage of the current rules.
Of course, it’s 2020. That means anything can happen. Stay tuned for more developments!
TMN members: if you couldn’t make any of the Virtual Green Light presentations the week before last, you can still catch them on the member portal: