Goldman Sachs indicates that if Kamala Harris becomes the Democratic presidential nominee, her economic policies are unlikely to differ significantly from those of President Biden. This assessment comes after Biden announced he would no longer seek the nomination, following intense pressure stemming from a lackluster debate performance against Donald Trump.
Following Biden’s statement, he endorsed Vice President Harris, who has expressed her intention to continue her candidacy. This shift has garnered support from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, experts believe that there will not be substantial changes in policy direction.
Goldman analysts, led by chief economist Jan Hatzius, suggested that the Democratic fiscal and trade policy agenda would remain stable under Harris’s potential leadership. They noted that the probability of Democrats maintaining the White House increased slightly, yet the likelihood remains below 40%.
According to Goldman’s previous analyses, tax policy will become a central focus next year, particularly as personal income tax cuts from the Tax Cuts and Jobs Act are set to expire at the end of 2025. The next administration will have to address the future of these tax cuts and consider new tax measures.
Key predictions from Goldman concerning fiscal policy under a potential Biden victory include:
– A proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current 35%/37%.
– A suggested corporate tax rate of 28%, up from the current 21%. Goldman expressed doubts about Congress agreeing to this level, anticipating a more likely outcome of around 25%. In contrast, Trump has proposed reducing the corporate tax rate to 20%.
– An increase in the Social Security and Medicare tax rate on incomes over $400,000 from 3.8% to 5%.
If Harris secures the nomination, speculation exists regarding possible vice presidential candidates, with governors like Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Arizona Senator Mark Kelly being considered top contenders.