Goldman Sachs predicts that if Kamala Harris becomes the Democratic presidential nominee, her economic policies will not differ significantly from those of President Biden. This comes after Biden announced on Sunday that he is withdrawing from the race amid increasing calls for him to resign, particularly following a lackluster debate performance against former President Donald Trump.
Following Biden’s statement, he endorsed Vice President Harris, who has expressed her intention to continue her candidacy. She has garnered support from notable figures including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this political shift, Goldman analysts, guided by chief economist Jan Hatzius, stated that they do not expect a meaningful change in the Democrats’ fiscal and trade policy agenda if Harris takes the nomination.
Goldman’s analysis indicates that while the chance of Democrats securing the White House may have increased slightly, it still remains under 40%. The firm had previously highlighted that taxation would become a central issue in the upcoming election, particularly with the impending expiration of personal income tax provisions from the Tax Cuts and Jobs Act by the end of 2025. The incoming administration will have to determine whether to extend these cuts or introduce new taxes.
Here are some key fiscal policy forecasts under a potential Biden victory, according to Goldman Sachs:
– 39.6%: Proposed tax rate for individuals earning $400,000 or more, an increase from the current 35%/37%.
– 28%: Proposed corporate tax rate under Biden, an increase from the current 21%. Analysts are doubtful that Congress will support this rate, suggesting that a 25% rate is more likely. Conversely, Trump has indicated a desire to reduce it to 20%.
– 5%: Proposed tax rate for Social Security and Medicare on incomes above $400,000, up from 3.8%.
Should Harris secure the nomination, speculation around potential vice presidential candidates includes Pennsylvania Governor Josh Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, and Arizona Senator Mark Kelly.