In a recent update on the Democratic presidential nomination, Goldman Sachs indicated that Kamala Harris’ economic plans would largely align with those of President Biden should she become the nominee. This announcement follows Biden’s decision to withdraw from the race amid increasing pressure after a challenging debate against former President Donald Trump.
Following his withdrawal, Biden endorsed Harris, who expressed her determination to proceed with her candidacy. She has already garnered significant support from notable figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs suggests that this leadership change will not drastically alter the Democratic Party’s policies.
Goldman analysts, led by chief economist Jan Hatzius, noted that they do not anticipate significant changes to the Democrats’ fiscal and trade policy agendas if Harris becomes the party’s nominee. While this change may marginally improve Democrats’ chances of winning the White House, the likelihood is still estimated to be just below 40%.
Looking ahead, Goldman highlighted that tax policy will be a major focus next year due to the impending expiration of certain provisions from the Tax Cut and Jobs Act at the end of 2025. The upcoming election will determine whether the tax cuts are extended and if new taxes or cuts are implemented.
Key fiscal policy predictions under a hypothetical Biden victory include a proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase in the corporate tax rate to 28% from the current 21%, and an increase in the Social Security and Medicare tax rate on incomes over $400,000 from 3.8% to 5%.
In the event that Harris wins the nomination, speculation is rising about potential vice presidential candidates, with Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly considered leading contenders.