Goldman Sachs has indicated that Kamala Harris’ economic plans are unlikely to differ significantly should she become the Democratic presidential candidate.
In a major announcement, President Biden declared on Sunday that he would not seek re-election amid growing pressure following a poorly received debate against former President Donald Trump. Shortly after, Biden endorsed Vice President Harris, who expressed her intention to pursue the nomination. She has already gained several notable endorsements from figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs analysts, led by chief economist Jan Hatzius, believe that policy changes will be minimal.
The transition from Biden to Harris has slightly increased the chances of a Democratic victory in the upcoming election, though Goldman estimates these odds to be just under 40%. Analysts previously noted that taxes are poised to take center stage in fiscal discussions next year, especially with the expiration of provisions from the Tax Cut and Jobs Act scheduled for the end of 2025. The incoming administration will be tasked with deciding the future of these tax cuts.
Goldman Sachs has provided some fiscal projections in the event of a Biden reelection. For instance, they speculate that the tax rate for individuals earning $400,000 or more could rise to 39.6%, from the current rates of 35% or 37%, and that Biden’s proposed corporate tax rate may increase to 28%, up from 21%. However, the firm expressed skepticism that Congress would agree to this and sees a 25% rate as a more realistic outcome. Additionally, Biden’s proposed tax rate for Social Security and Medicare on incomes exceeding $400,000 is expected to rise to 5%, compared to the current rate of 3.8%.
If Harris secures the nomination, predictions suggest that potential candidates for the vice presidential position could include Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.