Kamala Harris’ economic policies are expected to remain largely unchanged if she secures the Democratic presidential nomination, according to analysts at Goldman Sachs.
In a significant political shift, President Joe Biden announced on Sunday that he would withdraw from the race for the Democratic nomination. This decision came amid increasing calls for his resignation, particularly following a challenging debate performance against former President Donald Trump, the Republican candidate.
Shortly after his announcement, Biden endorsed Vice President Kamala Harris, who expressed her intention to continue her campaign. She has already garnered support from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts believe the transition will not result in substantial policy changes.
Goldman Sachs analysts, led by chief economist Jan Hatzius, stated in a report that they do not anticipate significant alterations to the Democrats’ fiscal and trade policy agenda if Harris is nominated. The likelihood of the Democrats winning the White House has increased slightly, now estimated at just under 40%, following the endorsement of Harris.
The analysts also emphasized that the forthcoming fiscal landscape will be dominated by tax considerations, particularly as specific provisions of the Tax Cut and Jobs Act are set to expire at the end of 2025. The next president will have to decide whether to extend these tax cuts or implement new taxes.
Goldman Sachs provided several projections regarding potential fiscal policies under a Biden administration:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% or 37%.
– A suggested corporate tax rate of 28%, up from the current 21%. However, Goldman expressed skepticism about Congress approving this rate, indicating that a 25% rate might be more feasible. In contrast, Donald Trump has proposed lowering the corporate tax rate to 20%.
– A plan for a 5% tax on Social Security and Medicare for incomes exceeding $400,000, an increase from the existing 3.8%.
Should Harris win the nomination, there are speculations about potential vice presidential candidates, with high odds given to governors such as Josh Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Arizona Senator Mark Kelly.