In a recent analysis, Goldman Sachs suggests that Kamala Harris’ economic plans will not differ significantly if she becomes the Democratic presidential nominee. This comes in light of President Biden’s announcement to withdraw from the Democratic race following criticism of his debate performance against Donald Trump.
Biden has officially endorsed Vice President Harris, who has expressed her commitment to her candidacy. She has garnered several prominent endorsements, including support from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, economists at Goldman Sachs predict that there will be no major shifts in the Democrats’ fiscal and trade policy agenda if Harris assumes the nomination.
According to Goldman analysts, led by chief economist Jan Hatzius, replacing Biden with Harris slightly raises the likelihood of a Democratic victory in the upcoming election, although it remains just under 40%. The firm has previously noted that the upcoming expiration of certain tax provisions from the Tax Cut and Jobs Act at the end of 2025 will place taxes at the forefront of fiscal discussions in the next year. The decisions made by the next president regarding the extension of tax cuts and additional tax policies will be pivotal.
Goldman’s forecasts for fiscal policies under a potential Biden victory include a proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%, and a corporate tax rate increase to 28%, although they express skepticism that Congress would agree, suggesting a more likely outcome around 25%. Additionally, Biden proposes raising the Social Security and Medicare tax rate on incomes exceeding $400,000 from 3.8% to 5%.
Should Harris secure the nomination, speculation regarding the vice presidential pick includes governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly of Arizona.