Kamala Harris’ economic plans are not expected to change significantly if she becomes the Democratic presidential nominee, according to analysts at Goldman Sachs.
On Sunday, President Biden announced he would withdraw from the race for the Democratic nomination, following mounting pressure after a lackluster debate performance against former President Donald Trump. Shortly after his announcement, Biden endorsed Vice President Kamala Harris, who confirmed her intention to pursue her candidacy. She has since received several notable endorsements, including those from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Goldman Sachs analysts indicated that, in the event of Harris becoming the nominee, they do not foresee substantial shifts in fiscal and trade policy for the Democratic party. The analysts noted that the probability of a Democratic victory in the presidential election increased slightly, but remains just below 40%.
A previous report from Goldman highlighted that taxes would become a primary fiscal concern next year, particularly as certain provisions of the Tax Cut and Jobs Act are set to expire at the end of 2025. The outcome of the election will influence decisions regarding the extension of these tax cuts and potential new taxes or cuts.
Key predictions from Goldman regarding fiscal policy under a potential Biden victory include:
– 39.6%: Proposed tax rate for individuals earning $400,000 or more, an increase from the current 35%/37%.
– 28%: Proposed corporate tax rate, raised from the current 21%, although Goldman expressed skepticism about Congress approving this, suggesting a 25% rate may be more feasible. In contrast, Donald Trump has indicated plans to reduce this rate to 20%.
– 5%: Proposed increase in the Social Security and Medicare tax rate on incomes exceeding $400,000, up from the present 3.8%.
Should Harris secure the nomination, prediction markets suggest the vice presidential candidacy could go to governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.