The outcome of the race for two U.S. Senate seats in Georgia could affect tax policies for the next few years, according to two Goldman Sachs leaders.

But even if Democrats take over both seats, the win may not be as significant for tax policy as some are predicting, according to Andrew King, vice president of tax policy and research for Ayco, a Goldman Sachs financial planning and investment firm located in Parsippany-Troy Hills, N.J. The win would give Democrats such a slim margin of control that the effect could be muted, he said during a webinar Wednesday on tax planning for investors and advisors sponsored by Goldman Sachs Financial Management.

“The election did not give us the certainty we were looking for,” King said. “There was no blue wave [of Democratic victories], and the makeup of the Senate is still up in the air until the Georgia runoff on January 5. Tax increases for the wealthy for next year are extremely unlikely” because Congress will be trying to reach an agreement on a stimulus package.

If Democrats win the two Georgia seats, the Senate will be evenly split between the two parties with Vice President-elect Kamala Harris acting as a tiebreaker when needed. The situation would give the Democrats control of both houses of Congress and the presidency,

In the meantime, taxpayers may want to take some actions before the end of this year, just in case any increases are passed during 2021 and made retroactive, King said. For instance, if an investor is considering selling appreciated assets next year, he or she may want to do it before December 31 in case capital gains taxes increase next year. Or, if parents want to transfer assets to children soon, they could do so now to pre-empt any potential decreases in the amounts that can be transferred tax-free, he said.

“The overall financial situation of the individual or family has to be taken into consideration before going forward, but if a person is considering making changes in the future, he or she may want to make them before the end of the year,” King said.

Techniques such as tax loss harvesting also may be advantageous before the end of the year, explained Sirion Skulpone, senior client portfolio manager of quantitative investment strategies at Goldman Sachs Asset Management. Investors can selectively sell assets that have lost money and use them to offset gains on other assets. “This is a technique that should be thought of throughout the year,” she said. “Investing in the equity market is the strongest tool an investor has to grow wealth, but every year you realize capital gains, you are faced with paying taxes on those gains. Taxes are already high, so the same techniques you might think about to prepare for any increases in 2021 will also work now.

“You also want to ‘own the market,’ meaning you want to own a basket of diverse securities to take advantage of volatility. The volatility in 2020 was extreme” both down and up, she said.

Taxpayers also can use strategies to reduce taxes using charitable deductions by bunching deductions into one year so they rise above the standard deduction of $12,000 for individuals, King said. The CARES Act, which provided relief for Covid-19, allows donors to deduct up to 100% of their adjusted gross income for charitable donations this year, rather than up to 60%, which is the standard in other years. “Taxpayers who can afford it may want to bunch their donations into this year to increase their deduction,” King said.