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October 16, 2020

What to expect in Washington (October 16)

President Trump added to his list of tax plans, saying on Fox Business October 15 that in a second term he'd lower the corporate tax rate further from 21% to 20% and cut income taxes for the middle class. "We're talking about income taxes for the middle-income people. May bring down the 21% down to 20, [an] even number, but the big tax for me is going to be the middle," he said. By contrast, Democratic presidential nominee and former VP "Biden wants to increase your taxes, including the middle class, and he wants to get rid of the tax cuts that we've given to the middle class … They're talking about quadrupling taxes."

Town halls

In an NBC town hall, President Trump was asked about concerns over corporations paying their fair share of tax:

  • "Our corporate taxes were the highest in the world and now they're among the lower taxes. They're not the lowest but they're among the lowest. And what that means is jobs, but, also, we're doing a very big, and we've done a very big middle-income tax package. So, if we get in, we're going to do the middle-income tax package but it's a great question. And if he comes along and raises rates all those companies that are coming in they will leave the US so fast your head will spin. We can't let that happen."

In an ABC town hall, Democratic nominee Biden clarified his intentions regarding the Tax Cuts & Jobs Act (TCJA):

  • "When I said the Trump tax cuts, about $1.3 trillion of the $2 trillion in his tax cuts went to the top .1 of 1%. That's what I'm talking about eliminating, not all the tax cuts that are out there. … We reduced the corporate tax rate from 35% and Democrats and Republicans who were in office thought it should come down to 28%. He reduced it to 21%. … If you raise the corporate taxes back to 28%, which is a fair tax, you'd raise [$1.3 trillion] by that one act."
  • "So you could raise a lot of money to be able to invest in things that can make your life easier, make you change your standard of living by making sure you have affordable healthcare, by making sure you're in a situation where you're able to send your kid to school, and if you have a student debt, you can deal with it. Making sure that your home, that you can pay your mortgage."
  • On whether it's wise to raise taxes while the economy is challenged: "Absolutely … when you allow people to get back in the game and have a job, everything moves. … We're going to invest a great deal of that money into infrastructure."
  • So, no delay on tax increases? "Well, I've got to get the votes."


On coronavirus relief and stimulus, Treasury Secretary Steven Mnuchin agreed to House Speaker Nancy Pelosi's (D-CA) language for a national strategic testing plan, Fox Business reported, but differences remain, along with the question of Senate GOP support for any deal. After the two talked October 15, a Pelosi spokesman tweeted in part that "The Speaker reminded the Secretary that the President has recently and repeatedly urged an agreement, and indicated his willingness to 'go big or go home'" and "raised Leader McConnell's comments today about not being willing to put a comprehensive package on the Senate floor. The Secretary indicated that the President would weigh in with Leader McConnell should an agreement be reached."

President Trump predicted during the NBC News town hall that Republicans would accept any bipartisan deal, but said he hadn't yet leaned on them to do so because Democrats have stood in the way of an agreement: "I haven't asked them to because I can't get through Nancy Pelosi." He tweeted October 15, "Pelosi is holding up STIMULUS, not the Republicans!"

Senate Majority Leader Mitch McConnell (R-KY), who plans a vote next week on a targeted $500 billion package, said in Kentucky October 15, "I think we need another rescue package. If we don't get it before the election, we'll get it after," Reuters reported. He said, however, that President Trump is talking about "a much larger amount (for coronavirus relief) than I can sell to my members" in the Senate.

The Washington Post reported McConnell as nonetheless saying "we're in discussions with the secretary of the Treasury and the speaker about a higher amount," but, "That's not what I'm going to put on the floor."


A New York Times/Siena College poll released October 15 showed President Trump leads Biden 49%-41% in South Carolina, and Senator Lindsey Graham (R-SC) leads Democrat Jaime Harrison in the Senate race 46%-40%.

Should Biden win the presidency, a major question is whether Democrats will move to end the Senate legislative filibuster in order to move policy agenda items. In an October 16 editorial focused on the 2013 ending of the judicial filibuster, the Wall Street Journal said, "Democrats are now promising to eliminate the legislative filibuster if they win Senate control on Nov. 3. They might keep in mind that, once it's gone, Republicans will need only 51 votes to dismantle whatever Democrats pass."


The Urban-Brookings Tax Policy Center revised its estimates of Biden's tax plans to say they would "increase federal revenues by $2.4 trillion over the next decade." The group in March estimated the proposals would raise about $4 trillion. "Our new revenue estimate is significantly lower than the March estimate for a number of reasons: several tax credit provisions the campaign has proposed since our initial analysis, our assumption that implementation of most proposals will be delayed until 2022, changes to previously proposed policies that are intended to hold harmless tax filers with incomes below $400,000, a revised economic forecast, and other technical changes," they said.


Contact Information
For additional information concerning this Alert, please contact:
Washington Council Ernst & Young
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