Tax News Update    Email this document    Print this document  

Today (Tuesday) is the deadline House Speaker Nancy Pelosi (D-CA) has set to reach a coronavirus relief and stimulus deal with the Administration. Following a call with Treasury Secretary Steven Mnuchin yesterday, a Pelosi spokesman tweeted in part that the two "continued to narrow their differences. The Speaker has tasked committee chairs to reconcile differences with their GOP counterparts on key areas. The Speaker continues to hope that, by the end of the day Tuesday, we will have clarity on whether we will be able to pass a bill before the election."

The Senate will vote today on a standalone Paycheck Protection Program (PPP) bill. Senate Majority Leader Mitch McConnell (R-KY) has also teed up a revised HEALS Act (the roughly $500 billion package blocked by Democrats September 10), with changes including those affecting nonprofits, for a vote on Wednesday, October 21. Both the PPP bill and HEALS Act are expected to be blocked by Democrats. McConnell has said the chamber would consider any Pelosi-Mnuchin deal that materializes.

Politico, noting "it is quite unusual for the Trump administration to negotiate legislation that turns off most members of Congress in President Donald Trump's own party," reported second-ranking Senate Republican John Thune (R-SD), long known as an astute observer of what to expect in Congress, as saying, "I think we're going to have a hard time finding 13 votes for anything." That means even with the support of all Democrats, a potential Pelosi-Mnuchin deal will have an uphill climb to achieve the requisite 60 Senate votes to overcome a filibuster.

On Fox this morning, President Trump repeated previous comments that he wants a coronavirus relief and stimulus package that exceeds the $2.2 trillion sought by House Democrats, and that he would expect congressional Republicans to ultimately agree with him. "I want to do it even bigger than the Democrats," he said.

The Senate yesterday rejected a Democratic motion to adjourn, and procedural tactics are expected to continue ahead of an expected cloture vote on the Amy Coney Barrett nomination on Sunday and potential confirmation vote on Monday, October 26. Democratic leader Chuck Schumer tweeted, "We are not going to have business as usual here in the Senate while the Republicans try to use an illegitimate process to jam through a Supreme Court nominee. Democrats are fighting to stop it." Republican staffers indicated they expect from Democrats procedural votes this week to try to derail both COVID relief and the confirmation of Judge Barrett to the Supreme Court.

A disapproval resolution regarding Community Reinvestment Act (CRA) regulations was not agreed to by the Senate yesterday on a vote of 43-48.

Election

The election is two weeks away. A New York Times/Siena College poll released this morning showed Democratic presidential nominee and former VP Joe Biden leading President Trump 50%-41% among likely voters.

In the Fox interview, President Trump expressed confidence about battleground states, saying, "We're up in Florida, way up, we're up in North Carolina. … Pennsylvania is pretty even, we got a ruling yesterday that was ridiculous, where they can count ballots after the election is over."

The Washington Post reported: "The Supreme Court on Monday night allowed Pennsylvania election officials to count mail-in ballots received up to three days after Election Day, refusing a Republican request to stop a pandemic-related procedure approved by the state's supreme court. The court's action involved a seemingly arcane voting practice, but carried outsized importance because of the state's pivotal role in the upcoming presidential election."

During an October 19 rally in Arizona, President Trump said, "We're cutting your taxes. They're raising your taxes. That's an easy one to figure out, isn't it? This election is a choice between a Trump super recovery or a Biden depression if he even gets to run." He also said of Biden, "He's going to raise your taxes by four or five times and they're going to put on regulations. Every company is going to say, 'let's get out of here.'"

WCEY overviews provide updates on congressional activity and the political landscape and what tax policy issues may be on the agenda post-election.

Tax

Today is the OECD Webinar to present the methodology and estimates of the economic impact assessment of the BEPS 2.0 Pillar One and Pillar Two proposals.

EY Global Tax Alerts are available: "OECD releases BEPS 2.0 Pillar One Blueprint and invites public comments" and "OECD releases BEPS 2.0 Pillar Two Blueprint and invites public comments".

Trade

On October 19, the US and Brazil signed a Protocol relating to Trade Rules and Transparency. The New York Times reported that the deal "will facilitate commerce between the countries, strengthen regulatory practices and crack down on corruption, officials from the two countries announced Monday."

On Friday, October 23 (at 12:00 p.m. ET), is the EY Webcast, "Tax in the time of COVID-19." The coronavirus (COVID-19) and the resulting economic crisis have made reacting to tax and trade developments more complicated and more difficult. Panelists will provide updates on: (i) US economy, elections and tax policy; (ii) Breaking developments; and (iii) What's happening at the IRS. Register for this Thought Center Webcast.

———————————————