Kamala Harris’ economic plans are expected to remain largely unchanged if she becomes the Democratic presidential nominee, according to Goldman Sachs.
President Joe Biden announced on Sunday that he would not seek re-election, following mounting pressure for him to step aside after a less-than-stellar debate performance against former President Donald Trump. In his statement, Biden endorsed Vice President Harris, who has expressed her intention to continue her campaign. She has garnered support from key figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, analysts at Goldman Sachs assert that this leadership change will not significantly alter Democratic policy.
Goldman’s chief economist Jan Hatzius noted that the fiscal and trade policy agenda is likely to remain stable under Harris’ nomination. They pointed out that while the shift may marginally increase the Democratic odds of securing the White House—though still below 40%—the core policies will not diverge drastically from Biden’s plans.
Taxation will be a central issue in the upcoming election, predominantly due to the expiration of provisions from the Tax Cut and Jobs Act at the end of 2025. The victor of the election will determine the future of these tax cuts, alongside potential new taxes.
Goldman provided several projections for fiscal policy if Biden were to secure a second term:
– A proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current 35%/37%.
– A suggested corporate tax rate of 28%, rising from the present 21%. Goldman remains doubtful that Congress would accept this figure, predicting a more likely outcome of 25%, especially as Trump aims to reduce the rate to 20%.
– An increase in the Social Security and Medicare tax rate on incomes exceeding $400,000 to 5%, up from the current 3.8%.
If Harris does become the nominee, there is speculation about potential vice presidential candidates, which could include Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly from Arizona.