The prospect of a divided government beginning in January with the 118th Congress helps clarify how federal and state tax policy might take shape for the remainder of 2022 and through the next two years. Surprisingly tight margins will likely usher in a period of political gridlock and less-than-ambitious tax legislative accomplishments. Important decisions will need to be made by lawmakers, both in the coming weeks and over the next several years. Join our tax policy team as we break down the dynamics and consider the legislative landscape awaiting businesses in the new year.
Our discussion focused on:
- Likelihood of a year-end tax bill that could include TCJA-related cliffs such as the treatment of R&E costs under section 174, the interest deduction limitation under section 163(j) and 100% business expensing
- Possible strategic priorities of a newly formulated Congress in 2023, and potential pressure points ahead
- Implications of the midterms on the IRS’ new funding and emerging focus on audit and enforcement
- How the new state legislative and gubernatorial landscape will affect state tax policy and legislation