July 15, 2020
What to expect in Washington (July 15)
President Trump and presumptive Democratic nominee Joe Biden are in the midst of dueling infrastructure announcements. In Wilmington, Delaware, on July 14, Biden outlined a plan to "create millions of high-quality, union jobs by building a modern infrastructure and a clean energy future," upping a $1.3 trillion plan announced in November to $2 trillion and addressing areas like energy retrofitting for lighting and cash rebates and low-cost financing to upgrade energy inefficient appliances and windows and purchase electric vehicles. Politico reported campaign aides as saying the plan would be paid for in part with tax increases on corporations and the "wealthiest Americans," consistent with the previously announced plan, though some may be treated as stimulus spending. The Trump campaign criticized the prospect of tax increases.
Today (July 15), President Trump travels to Atlanta for a speech to announce, according to the New York Times, changes to the National Environmental Policy Act "to limit public review of federal infrastructure projects to speed up the permitting of freeways, power plants and pipelines" and "make the case that lengthy permit processes have held up major infrastructure projects across the country."
The location is significant because Georgia has become more competitive in the presidential race and has two Senate elections this year, including a special election with appointed Senator Kelly Loeffler (R-GA) competing against Rep. Doug Collins (R-GA) on the Republican side. (There is no primary; all candidates are on the November 3 ballot and a runoff will follow if no one gets at least 50% of the vote.)
In the July 14 primaries, former Senator and Attorney General Jeff Sessions was defeated in his bid to return to the Senate by former Auburn football coach Tommy Tuberville, who will face Senator Doug Jones (D-AL) in a race already rated as leaning toward Republicans. Sara Gideon was confirmed as the Democratic opponent of Senator Susan Collins (R-ME) in the Maine Senate race.
While control of the Senate is considered up for grabs, Democrats are favored to retain their House majority and now, according to a Washington Post story, possibly add to it, with concerns about the 31 members in districts President Trump won in 2016 diminishing, new pick-ups of Republican seats being eyed, and confidence of success based on the 2018 campaign playbook that focuses on health care.
Ahead of bipartisan negotiations on a next coronavirus response bill expected to begin next week, with the expiration of the unemployment insurance (UI) expansion on July 31 seen as an action-forcing deadline, the Washington Post reported that Republicans are discussing a plan to drop the $600 UI add-on to between $200-$400. Republicans have criticized the boosted amount as a disincentive to work, but the report said they are now more open to a narrower version given new strains on the economy.
On July 14, the IRS released Notice 2020-56, extending until December 31 the deadline for tax-exempt hospitals to conduct a Community Health Needs Assessments (CHNA) and adopt an implementation strategy to meet those needs. The IRS announced the extension "because of the burdens the COVID-19 pandemic has placed on hospitals."
A Wall Street Journal op-ed, "The Biden Tax Hike Would be Severe," warns against the candidate's proposals to have payroll taxes kick back in on earnings above $400,000 and increase the top capital gains tax.
EY has published an International Tax Alert on final regulations on the deduction allowed to a domestic corporation for its foreign-derived intangible income (FDII) and global intangible low-taxed income (GILTI).
The global EY Tax COVID-19 Response Tracker has been updated through July 9.