In a recent analysis, Goldman Sachs indicated that Kamala Harris’ economic policies would likely remain consistent if she were to become the Democratic presidential nominee.
President Biden announced on Sunday that he would not seek the Democratic nomination, following increased calls for him to withdraw after a lackluster debate performance against former President Donald Trump. Shortly thereafter, Biden endorsed Vice President Harris, who affirmed her intention to run and gained support from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs suggests this transition may not significantly alter the party’s policy direction.
Goldman’s analysts, led by chief economist Jan Hatzius, noted that they do not expect substantial changes to the Democratic Party’s fiscal and trade policy agenda if Harris becomes the nominee. The firm assessed that the probability of Democrats securing the presidency has risen marginally but remains under 40%.
Additionally, Goldman Sachs has highlighted that tax policy will be a significant focus for the coming year, particularly with the expiration of certain provisions of the Tax Cut and Jobs Act set for the end of 2025. This situation will require the next president to address potential extensions of tax cuts or implement new tax measures.
Specifically, Goldman outlined several fiscal policy forecasts linked to a potential Biden victory:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% or 37%.
– An increase in the corporate tax rate to 28%, up from 21%, though Goldman expressed skepticism about Congress agreeing to this, suggesting a more likely rate would be 25%. In contrast, Republican candidate Donald Trump has pledged to reduce the rate to 20%.
– A proposed increase in the Social Security and Medicare tax on incomes above $400,000 to 5%, up from the current 3.8%.
If Harris becomes the nominee, speculation surrounds potential vice presidential choices, with Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly considered likely candidates.