Goldman Sachs suggests that if Kamala Harris becomes the Democratic presidential nominee, her economic plans will largely mirror those of President Biden. This perspective follows Biden’s announcement that he is withdrawing from the race amid increasing pressure after a contentious debate with Republican candidate Donald Trump.
Upon stepping down, Biden endorsed Harris, who confirmed her intention to continue her campaign and received prominent endorsements from figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs analysts, led by chief economist Jan Hatzius, indicate that there will not be a significant shift in fiscal and trade policies if Harris leads the ticket.
Goldman’s analysis suggests that the chances of Democrats winning the presidency have increased slightly but remain below 40%. The firm previously noted that tax policies will be a major focus next year, particularly with the scheduled sunset of provisions from the Tax Cut and Jobs Act at the end of 2025. This situation will compel the eventual winner of the election to address the future of these tax cuts.
In terms of fiscal policy predictions under a potential Biden victory, Goldman Sachs points out several key figures:
– A proposed tax rate of 39.6% on individuals earning over $400,000, an increase from the current rates of 35% and 37%.
– A suggested corporate tax rate of 28%, higher than the current 21%, though Goldman expresses skepticism about this figure being approved by Congress, predicting a more realistic outcome of around 25%. Meanwhile, Trump has promised to reduce the corporate tax rate to 20%.
– An increase in the Social Security and Medicare tax rate for incomes exceeding $400,000, proposed at 5%, up from the current 3.8%.
Should Harris secure the nomination, speculation indicates that potential vice presidential candidates could include Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.