Kamala Harris’ economic strategies are expected to remain largely unchanged if she secures the Democratic presidential nomination, according to analysts at Goldman Sachs.
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In a recent announcement, President Biden stated he would withdraw from the Democratic nomination race amid increasing pressure following a lackluster debate performance against former President Donald Trump. Shortly after this announcement, Biden endorsed Vice President Kamala Harris, who expressed her commitment to continue her campaign. She has already garnered notable endorsements from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Nevertheless, any major policy shifts between a Biden and Harris candidacy are not anticipated.
Goldman Sachs analysts, led by chief economist Jan Hatzius, indicated that a change in the nomination would not significantly alter the Democrats’ fiscal and trade policy objectives. They noted that the likelihood of a Democratic victory in the upcoming presidential election has increased slightly but remains below 40%, according to their estimates.
Goldman’s prior analysis highlighted that tax policy would take center stage next year due to the impending expiration of the personal income tax cuts from the Tax Cuts and Jobs Act at the end of 2025. The outcome of the presidential election will determine if these cuts are extended and if new taxes or reductions are introduced.
The firm presented some projections concerning fiscal policy under a hypothetical Biden victory:
– 39.6%: The proposed tax rate for individuals earning $400,000 or more, an increase from the current 35%-37%.
– 28%: The planned corporate tax rate, an increase from the existing 21%, although Goldman expressed doubt that Congress would agree to this, suggesting a more likely rate of 25%. Republican nominee Donald Trump has promised to lower it to 20%.
– 5%: The proposed tax rate on Social Security and Medicare for incomes exceeding $400,000, up from the current 3.8%.
Should Harris become the nominee, it is anticipated that Pennsylvania Governor Josh Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly could be leading candidates for the vice presidential nomination.