Goldman Sachs has indicated that Kamala Harris’ economic policies are unlikely to differ significantly if she becomes the Democratic presidential nominee. This assessment comes in light of President Biden announcing he would not seek reelection following increased calls for him to step aside, particularly after a challenging debate performance against Donald Trump.
In the aftermath of his announcement, Biden endorsed Harris, who expressed her intent to proceed with her candidacy and received support from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs analysts suggest that the shift from Biden to Harris is not expected to result in substantial changes to the party’s fiscal and trade policies.
Analysts from Goldman noted that the Democratic Party’s fiscal and trade agenda is likely to remain consistent, even if Harris secures the nomination. They reported that the odds of the Democrats winning the presidential election have increased slightly but remain just below 40%.
According to previous Goldman research, taxes are anticipated to become a focal point in the upcoming election cycle, particularly as the individual tax cuts from the Tax Cuts and Jobs Act are set to expire in 2025. The outcome of the election will determine whether those tax cuts are extended and whether any new taxes are introduced.
Goldman’s forecasts for fiscal policies under a potential Biden victory include:
– A tax rate of 39.6% for individuals earning $400,000 or more, an increase from the existing 35%/37%.
– A proposed corporate tax rate of 28%, up from the current 21%, although Goldman expressed skepticism about Congress agreeing to this figure, suggesting a 25% rate might be more feasible.
– An increase in the Social Security and Medicare tax rate on incomes over $400,000 from 3.8% to 5%.
If Harris becomes the nominee, speculation suggests potential vice presidential candidates might include Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.