Election Results (So Far): Preliminary Observations on Future Tax Agenda

The following KPMG report summarizes key election results so far and provides some preliminary observations regarding the possible implications of the elections on tax legislation in 2021.

Currently:

• Former Vice President Joe Biden and Senator Kamala Harris have received more than the number of electoral votes needed to be the next president and vice president, respectively, of the United States.
• Democrats apparently will control the next U.S. House of Representatives, but by a considerably narrower margin than in the current Congress. 
• The issue of whether the next Senate will be controlled by Republicans or Democrats at the outset of the Biden administration will be determined by run-off elections in the state of Georgia will be held until January 5, 2021. 

As a result of the uncertainty surrounding the two Georgia seats in the U.S. Senate, it will not be clear until January 2021 whether there will continue to be divided government at the federal level or whether the Democratic party will control the White House as well as both chambers of Congress. This lack of certainty has implications for tax planning (including year-end planning). The prospects for the enactment of major tax policy changes in the next couple years can be expected to be lower under a divided government scenario than under a scenario in which one party controls the White House as well as both chambers of Congress.