Goldman Sachs has indicated that Kamala Harris’ economic policies are unlikely to diverge significantly from President Biden’s if she secures the Democratic presidential nomination.
In a recent announcement, President Biden stated that he will not pursue the Democratic nomination, following mounting pressure after his underwhelming debate performance against former President Donald Trump. Following his statement, Biden endorsed Vice President Harris, who confirmed her intention to continue her campaign. She has since garnered endorsements from prominent figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this change in leadership, Goldman Sachs predicts minimal alteration in policy direction.
Goldman analysts, led by chief economist Jan Hatzius, noted in a report that they do not foresee significant changes to the Democrats’ fiscal and trade policy agenda should Harris become the nominee. The predictions suggested that the likelihood of a Democratic victory in the upcoming presidential race sees only a slight increase, estimating it to be just under 40%.
The firm also highlighted that tax policy will take center stage next year as the personal income tax provisions of the Tax Cut and Jobs Act are set to expire at the end of 2025. The outcome of the election will determine the fate of these tax cuts as well as any new taxation measures.
Specific forecasts on fiscal policy include:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, up from the current 35%/37%.
– A suggested corporate tax rate of 28%, an increase from the current 21%, though Goldman expressed doubt that Congress would approve this, seeing a 25% rate as more feasible. In contrast, Trump has pledged to lower the rate to 20%.
– A proposed Social Security and Medicare tax rate of 5% on incomes exceeding $400,000, an increase from the current 3.8%.
In the event Harris is nominated, speculation regarding her potential running mate suggests governors such as Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly could be contenders for the vice presidential position.