Goldman Sachs has suggested that Kamala Harris’ economic policies are unlikely to differ significantly if she becomes the Democratic presidential nominee. This comes in the wake of President Biden’s recent announcement that he will not seek re-election, following criticism of his debate performance against Donald Trump.
Upon Biden’s endorsement of Harris, she expressed her intention to continue her candidacy, garnering support from various prominent figures including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. However, experts predict that there will be minimal changes in economic policy irrespective of Harris taking the lead.
Goldman analysts, led by chief economist Jan Hatzius, noted that they do not anticipate any substantial shifts in fiscal and trade policy should Harris become the nominee. The firm’s analysis indicated that while there may be a slight increase in the Democrats’ chances of winning the presidency to just under 40%, the fundamental approach to economic issues will remain largely unchanged.
The firm pointed out that taxes will be a significant focus in the upcoming year, especially with the personal income tax provisions of the Tax Cuts and Jobs Act set to expire at the end of 2025. The next president will play a crucial role in determining the future of these tax cuts, including the possibility of new taxes.
Goldman’s projections for fiscal policy under a Biden win include a proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%. They also forecast a corporate tax rate of 28%, up from 21%, though they expressed skepticism about Congress agreeing to such a rise, suggesting a more realistic outcome would be around 25%. Additionally, there’s a proposed increase in Social Security and Medicare tax for high earners, raised to 5% from the current 3.8%.
If Harris secures the nomination, it is anticipated that the vice-presidential spot could go to several potential candidates, including Pennsylvania Governor Josh Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.