Goldman Sachs suggests that Kamala Harris’ economic policies would not significantly differ from President Biden’s if she becomes the Democratic presidential nominee. Following Biden’s announcement that he will not seek re-election, he endorsed Harris, who has gained support from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
In a note released by Goldman Sachs, analysts led by chief economist Jan Hatzius stated that they do not expect any meaningful changes in the Democrats’ fiscal and trade policy agenda if Harris becomes the nominee. While the endorsement raised the Democrats’ chances of winning the White House slightly, they remain just under 40%.
Goldman Sachs had previously indicated that taxes will become a primary focus next year, particularly with the impending expiration of personal income tax provisions under the Tax Cut and Jobs Act by the end of 2025. The outcome of the election will determine the future of those tax cuts and the possibility of new taxes or reductions.
The firm outlined several forecasts regarding fiscal policy under a potential Biden administration:
– 39.6%: The proposed tax rate for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%.
– 28%: The suggested corporate tax rate, which would rise from the current 21%, though Goldman expressed skepticism that Congress would agree on this, with a 25% rate considered more likely. In contrast, Donald Trump, the presumptive Republican nominee, has promised to cut the corporate tax to 20%.
– 5%: Biden’s proposed tax rate for Social Security and Medicare on incomes above $400,000, which would increase from the current 3.8%.
Should Harris become the nominee, speculation indicates that possible vice presidential candidates could include Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.