October 23, 2020
What to expect in Washington (October 23)
During the second and final debate between President Trump and Democratic presidential nominee and former Vice President Joe Biden on October 22, health care was a major focus. President Trump celebrated his success in nullifying the individual mandate (in the 2017 tax reform law), and said of the Affordable Care Act (ACA), "Now it's in court because Obamacare is no good … no matter how well you run it, it's no good. What we'd like to do is terminate it. … Preexisting conditions will always stay. What I would like to do is a much better healthcare — much better, we'll always protect people with preexisting. So I'd like to terminate Obamacare, come up with a brand new beautiful healthcare. … We have 180 million people out there that have great, private healthcare, far more than we're talking about with Obamacare. Joe Biden is going to terminate all of those policies."
Biden countered by saying:
On taxes, President Trump said, "I'm cutting taxes and he wants to raise everybody's taxes and he wants to put new regulations on everything. He will kill it. If he gets in you will have a depression the likes of which you've never seen. Your 401Ks will go to hell and it'll be a very, very sad day for this country." The President also highlighted the Opportunity Zone program under the Tax Cuts & Jobs Act.
Biden criticized President Trump for not releasing his tax returns, saying of his tax situation, "Nobody knows, Mr. President. What they do know is you're not paying your taxes, or you're paying taxes that are so low … last time he said what he paid, he said, 'I only paid that little because I'm smart. I know how to game the system.'" President Trump said he "paid millions and millions of dollars. … I paid in advance. It's called pre-paying your taxes."
Regarding a potential bipartisan deal on coronavirus relief and stimulus legislation, House Speaker Nancy Pelosi (D-CA) said during a news conference, "they still haven't completely signed off on it, but I think we're just about there," but also that there is no agreement yet on the major issues of state and local funding and liability protections. White House economic adviser Larry Kudlow on Bloomberg TV this morning confirmed that there are still significant policy differences between the two sides, pondered the challenges of writing and processing what he said could be a 2,000-page bill, and said that he is neither optimistic nor pessimistic.
There are questions of whether there would be enough time for the Senate to vote on a potential coronavirus deal before the election. The Wall Street Journal said "resistance in the GOP-controlled Senate, in addition to the timeline posed by the Nov. 3 elections, less than two weeks away … left many on Capitol Hill resigned to the reality that any deal would almost certainly not be considered until after the election at the earliest, and potentially not until next year. 'It's about three or four minutes to midnight on the clock here,' said Senate Appropriations Committee Chairman Richard Shelby (R., Ala.)."
The Washington Post reported October 22, "Senate Republicans are growing increasingly frustrated with Treasury Secretary Steven Mnuchin as he makes what they see as unacceptable compromises in his quest for a stimulus deal with House Speaker Nancy Pelosi."
President Trump said during the debate that Speaker Pelosi doesn't want a deal because she thinks the impasse will be beneficial to Democrats in the election. Biden cited Majority Leader Mitch McConnell's (R-KY) comments that Senate Republicans probably don't have the votes to support a massive deal.
A Muhlenberg College/Morning Call poll released October 23 finds former Vice President Joe Biden holding a seven-point lead (51%-44%) over President Donald Trump among likely Pennsylvania voters.
A Washington Post op-ed co-authored by former Treasury Secretary Larry Summers said, as its title, "Many companies pay nothing in taxes. The public has a right to know how they pull it off." It called for the Schedule M-3, which reconciles the differences between income reported to shareholders and income taxed, to be released by the IRS or for the SEC to compel disclosure. "In this area, as in so many, tax transparency will lead to accountability and ultimately wiser policy," the op-ed said.
The White House October 22 released a memorandum, "Pensions of Delphi Corporation Retirees and Other Retirees Covered by Vulnerable Pension Plans," directing Treasury, Labor and Commerce to "review the pension plans presently held in trusteeship by the PBGC and inform the President within 180 days of the date of this memorandum of any appropriate action that may be taken consistent with applicable law. Actions may include proposing legislation that appropriately balances the interests of all those covered by the pension system — from retirees, workers, employers, and unions, to plans and taxpayers — to address the insolvency of such plans and to maintain the future solvency of the PBGC's Single-Employer and Multi-Employer Programs."
House Committee on Education and Labor Chairman Bobby Scott (D-VA) released a statement calling the White House determination that the multiemployer pension issue needs more study "simply unacceptable. We already had a select congressional committee on this issue that occurred on President Trump's watch. Quite frankly, the multiemployer pensions crisis has been studied enough. It's long past time for real solutions. House Democrats understand the urgency of this crisis and have voted three separate times to fully protect retirees' pensions. Now, we are continuing to fight for the multiemployer pensions relief in the Heroes Act as the Speaker continues negotiations with Secretary Mnuchin."
Today, 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.