Goldman Sachs has stated that if Vice President Kamala Harris becomes the Democratic presidential nominee, her economic policies will likely not differ significantly from those of President Biden. This observation comes in light of President Biden’s recent decision to withdraw from the race amid mounting pressure following a weak debate performance against Donald Trump.
Biden has endorsed Harris, who is now actively pursuing her candidacy and has secured backing from prominent figures such as California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. However, Goldman Sachs anticipates continuity in fiscal and trade policies, suggesting that any administration under Harris would maintain a similar economic agenda.
According to Goldman’s chief economist, Jan Hatzius, the probability of Democrats winning the presidency with Harris as the nominee has increased slightly, now estimated to be just below 40%. Analysts also emphasized that tax policy will likely remain a primary focus in the upcoming election, particularly due to the expiration of significant provisions from the Tax Cuts and Jobs Act at the end of 2025.
Several key tax proposals outlined by Goldman include:
– A potential increase in the tax rate for individuals earning over $400,000 from the current 35%/37% to 39.6%.
– A rise in the corporate tax rate from 21% to a proposed 28%, though analysts express doubt about Congress agreeing to this increase, with 25% seen as a more realistic outcome.
– An increase in the Social Security and Medicare tax rate on incomes exceeding $400,000 from 3.8% to 5%.
Looking ahead, various prediction markets suggest that, if Harris secures the nomination, she could choose from several candidates for the vice presidential role, including governors and senators.
In summary, while the transition from Biden to Harris marks a significant moment in the Democratic race, Goldman Sachs emphasizes a steady approach to economic policy, thereby suggesting that voters can expect continuity in the party’s fiscal strategy. This predictability may provide a sense of stability in an otherwise tumultuous political landscape.
As the election approaches, there is hope that Harris’s campaign will inspire renewed enthusiasm among the Democratic base, potentially galvanizing support and driving higher voter turnout.