Goldman Sachs has indicated that if Kamala Harris becomes the Democratic presidential nominee, her economic policies will likely be similar to those of President Biden. This comes after Biden announced he would not seek re-election, following pressure stemming from a lackluster debate performance against former President Donald Trump.
After Biden’s announcement, he endorsed Vice President Harris, who confirmed her intention to run for the presidency. Harris received endorsements from several prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman analysts believe this change will not lead to a significant shift in policy direction.
Goldman’s analysis suggests that the Democrats’ fiscal and trade policies are expected to remain consistent should Harris become the nominee. While the shift from Biden to Harris is seen as marginally improving Democrats’ chances of winning the White House, those odds are still below 40%.
The firm has noted that tax policy will be a primary focus in the upcoming years, particularly with the expiration of certain provisions of the Tax Cuts and Jobs Act coming at the end of 2025. This will place significant importance on the incoming administration’s decisions regarding tax extension or adjustments.
Goldman Sachs provided several forecasts for potential fiscal policies under President Biden’s continued leadership. They noted a proposed tax rate increase for individuals earning over $400,000 from 35%/37% to 39.6%. Additionally, Biden’s proposed corporate tax rate could rise from 21% to 28%, although some skepticism exists regarding Congressional approval of such a rise, with a 25% rate being deemed more feasible. Furthermore, Biden aims to increase Social Security and Medicare taxes on higher incomes, raising the rate from 3.8% to 5%.
Should Harris secure the nomination, speculation regarding the vice presidential candidate points towards several governors, including Shapiro from Pennsylvania, Roy Cooper from North Carolina, Andy Beshear of Kentucky, and Arizona Senator Mark Kelly.