Goldman Sachs predicts that Kamala Harris’ economic plans will not significantly differ if she becomes the Democratic presidential nominee.
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President Biden announced on Sunday that he is withdrawing from the Democratic nomination race amid increasing calls for him to step down, following a poor debate performance against Republican candidate and former President Donald Trump.
After releasing a statement about his decision, Biden endorsed Vice President Kamala Harris, who confirmed her intention to pursue the candidacy. She has received support from several prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, policy changes are expected to be minimal.
Goldman analysts, led by chief economist Jan Hatzius, wrote in a note late Sunday that there wouldn’t be significant shifts in Democrats’ fiscal and trade policy agendas if Harris becomes the nominee.
Goldman Sachs notes that the likelihood of Democrats winning the White House with Harris as the nominee has increased slightly, but remains below 40%.
Looking ahead, taxes are expected to be a major focus next year with the expiration of the personal income tax provisions of the Tax Cut and Jobs Act at the end of 2025. Thus, the election winner will influence how much of the tax cut is extended and whether there will be new taxes or cuts.
Previously, Goldman researchers outlined some fiscal policy forecasts under a Biden victory:
– 39.6%: The proposed tax rate on individuals earning $400,000 or more, an increase from 35%/37%.
– 28%: The proposed corporate tax rate, up from the current 21%. However, Goldman analysts believe a rate of 25% is more likely.
– 5%: The proposed Social Security and Medicare tax rate on incomes over $400,000, up from 3.8%.
If Harris becomes the nominee, prediction markets suggest the top candidates for her vice-presidential slot are Governors Josh Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.