Goldman Sachs has indicated that Vice President Kamala Harris’ economic agenda is unlikely to differ significantly from President Biden’s if she becomes the Democratic presidential nominee.
Following President Biden’s announcement that he would not seek reelection amid pressures following a subpar debate performance against Donald Trump, he endorsed Harris, who confirmed her candidacy. Harris has already secured endorsements from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this leadership change, analysts at Goldman Sachs believe that there will be little shift in the Democratic fiscal and trade policy agenda should Harris be nominated.
Goldman noted that the likelihood of Democrats retaining the White House has slightly increased but remains just below 40%. The firm has previously highlighted that tax policies will take center stage as the expiration of personal income tax provisions from the Tax Cuts and Jobs Act approaches at the end of 2025. The next president will need to address whether to extend these cuts or implement new taxes.
Goldman’s projections for fiscal policy under a potential Biden win include a proposed tax rate of 39.6% for individuals earning over $400,000, up from current rates of 35% and 37%. They also forecast a corporate tax rate increase to 28%, although they express skepticism regarding congressional approval, suggesting a 25% rate may be more likely. Additionally, Biden has proposed raising the Social Security and Medicare tax rate for high earners to 5%, up from 3.8%.
As for the vice presidential nomination, prediction markets currently favor Pennsylvania Governor Josh Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly as potential candidates if Harris secures the nomination.