Goldman Sachs believes that Vice President Kamala Harris’ economic policies would not significantly differ from President Biden’s if she becomes the Democratic presidential nominee.
On Sunday, President Biden announced that he would not seek re-election, following intense pressure to step down due to concerns over his debate performance against former President Donald Trump. In his statement, Biden endorsed Harris, who has expressed her intention to continue her candidacy. She has already gained support from prominent figures, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro.
Goldman analysts, led by chief economist Jan Hatzius, noted that they do not expect any meaningful changes to the Democrats’ fiscal and trade policy agenda should Harris secure the nomination. The transition from Biden to Harris marginally increased the Democrats’ chances of winning the presidency to just under 40%.
The analysts pointed out that tax policies will be a significant focus for the next administration, especially as the personal income tax provisions under the Tax Cut and Jobs Act are set to expire at the end of 2025. The incoming administration will determine whether to extend these cuts or impose new taxes.
Goldman Sachs forecasts suggest several tax rates under a potential Biden administration: a proposed tax rate of 39.6% for individuals earning over $400,000, an increase in the corporate tax rate to 28% (although a 25% rate is deemed more likely), and a 5% increase in Social Security and Medicare taxes for high earners. Should Harris be nominated, possible contenders for the vice presidential position could include governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.