Goldman Sachs suggests that Kamala Harris’ economic policies are unlikely to differ significantly from those of President Biden if she becomes the Democratic presidential nominee. This assessment comes in light of Biden’s recent announcement that he would not seek re-election, following criticism of his performance in a debate against Donald Trump.
Biden has endorsed Harris, who has expressed her intent to continue her campaign. She has garnered support from notable figures, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. However, Goldman analysts, led by chief economist Jan Hatzius, noted that the transition from Biden to Harris is not expected to result in major changes to the Democratic fiscal and trade policy agenda.
According to Goldman, the shift in leadership has slightly improved the Democrats’ chances of winning the presidency, now estimated to be below 40%. The firm’s research indicates that taxes will become a significant focus in the next election cycle as provisions of the Tax Cut and Jobs Act are set to expire by the end of 2025. The upcoming election will determine the future of these tax cuts and potential new fiscal measures.
Goldman’s fiscal policy forecasts under a probable Biden win include proposing a tax rate of 39.6% on individuals earning $400,000 or more, increasing the corporate tax rate to 28%, and raising Social Security and Medicare taxes on higher incomes to 5%. In the event that Harris secures the nomination, speculation suggests potential vice presidential candidates could include Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly from Arizona.