Want to receive this newsletter every weekday? Subscribe to POLITICO Pro. You'll also receive daily policy news and other intelligence you need to act on the day's biggest stories. SO NOW WHAT? This much we know — the results of the midterms in November will likely have some effect on the talks over a year-end tax deal. But how exactly isn't totally clear. Long story short: The chances for a year-end tax deal depend in large part on how much interest congressional leaders have in tying up loose ends before 2023. For a variety of reasons, Democrats appear to have some increased momentum heading into the final stretch of the election, making control of the Senate next year look more like a toss-up. (The House is still expected to flip to the GOP.) But will Republicans want to hold off on doing too much in the lame-duck if they win both the House and the Senate, to give them wider latitude to set the agenda on the Hill next year? And would Democrats seek an agreement on taxes in November or December if they retained control of the Senate, assuming that it'll be tough to score any policy achievements with a GOP House next year? It's also more than just a question of which party wins, too — the size of the majorities for the next Congress will also matter. For instance, lobbyists watching the issue speculated that House Minority Leader Kevin McCarthy (R-Calif.) — who hopes to be Speaker next year — might feel more breathing room to sign off on a tax deal if Republicans win a healthy majority in the fall. DID NOT SEE THAT ONE COMING: Pascal Saint-Amans, who worked for years to update international tax rules before helping push the global tax deal across the finish line last year, is leaving his position as director of the tax center at the Organization for Economic Cooperation and Development. Saint-Amans' departure certainly was not expected — and raises new questions about how much of that global tax deal will actually get implemented, as our Bjarke Smith-Meyer reported from Brussels. Those questions are being asked on this side of the pond, too. Democrats didn't include the changes needed to comply with the minimum tax portion of the global tax deal, known as Pillar Two, while the EU is having its own issues getting that part up and running, too. And that's not even getting into Pillar One, the part of the agreement that seeks to tax companies based more on where their customers are located and which has its own implementation hurdles. The sense among U.S. experts closely watching the global tax scene is that there's no way that the departure of Saint-Amans can help. After all, the OECD tax director has quite literally traveled the world to build support for the global tax agreement and has been working tirelessly to try and iron out the details on the deal. How much it hurts is another question, considering all the current problems facing implementation of the global tax deal. Some experts say Saint-Amans leaving the OECD will have a huge negative impact, while others said they couldn't say how much damage it would cause. GOING OLD SCHOOL TORY: The Conservatives made it official on Monday — Liz Truss will be the U.K.'s next prime minister. That's been the expected outcome ever since the race to be next Conservative leader was narrowed to a two-person race, between Truss and Rishi Sunak, the former chancellor of the exchequer. But this also means that Truss will get a chance to put her perspective on taxes into action. In short, the incoming prime minister wants tax cuts and lots of them. Some experts have questioned whether that approach would work, arguing that tax relief would only inflame what's already high inflation in the U.K. (Sunak, for instance, said he would pursue more tax cuts only when inflation was more under control.) Truss has vowed to cut national insurance contributions, a key method for financing government benefit programs, and to hold off on a planned increase in the corporate tax — while also suggesting that past Conservative governments haven't focused enough on whether their policies grew the economy, and too much on whether it offered relief at the lowest levels of the income ladder. More immediately, Truss has said she'll offer up a plan to offer Britons relief from high energy prices in short order. But with the next parliamentary election not expected until 2024, it remains to be seen how much in the way of tax-cutting Truss will actually get done. Her presumed finance minister, Kwasi Kwarteng, has implied there might not be as much "fiscal loosening" as people expect, at least at first. And the opposition Labour Party isn't wasting any time in knocking Truss' approach on taxes, arguing that she would be seeking, among other things, a "huge stealth tax cut for banks."
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