Goldman Sachs has indicated that Kamala Harris’ economic policies are unlikely to differ significantly from President Biden’s if she becomes the Democratic presidential nominee. This assessment comes after Biden announced he would not seek re-election following calls for him to step down due to his debate performance against Donald Trump.
Biden subsequently endorsed Harris, who confirmed her candidacy and garnered support from prominent figures like California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. However, analysts at Goldman Sachs state that they do not expect a substantive shift in the fiscal and trade policies under a Harris nomination.
The chances of Democrats securing the White House have slightly increased, but remain under 40%, according to Goldman. Analysts have also previously noted that taxes will play a central role in fiscal policy discussions next year, particularly with the impending expiration of the Tax Cuts and Jobs Act’s personal income tax provisions at the end of 2025. The next president will play a key role in deciding whether to extend these cuts and what new tax measures may be introduced.
Key forecasts from Goldman Sachs regarding potential fiscal policy changes include:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current 35%/37%.
– A suggested corporate tax rate of 28%, up from 21%, though analysts believe a more likely outcome is a rate closer to 25%.
– An increase in the proposed Social Security and Medicare tax rate on incomes over $400,000 from the current 3.8% to 5%.
Should Harris secure the nomination, speculation points to potential vice presidential candidates such as Governors Shapiro (Pennsylvania), Roy Cooper (North Carolina), Andy Beshear (Kentucky), or Senator Mark Kelly (Arizona).