Goldman Sachs predicts that Kamala Harris’ economic plans will not significantly differ if she becomes the Democratic presidential nominee.
This analysis follows President Biden’s announcement of his withdrawal from the race, which came after intense pressure for him to step aside following a lackluster debate performance against former President Donald Trump. After Biden’s decision, he endorsed Vice President Harris, who expressed her intent to continue her candidacy and received several prominent endorsements, including those from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy.
Despite the leadership change, Goldman Sachs analysts, led by chief economist Jan Hatzius, noted that there would likely be no substantial shift in the Democrats’ fiscal and trade policy agenda. The firm’s analysts estimated that the odds of the Democrats winning the presidency increased slightly but remained just below 40%.
Goldman researchers also highlighted that taxes would be a primary focus in the coming years, particularly with the expiration of personal income tax provisions from the Tax Cuts and Jobs Act at the end of 2025, indicating that the next election’s victor will dictate the direction of tax policies.
Specific projections for economic policy under a potential Biden victory were shared, such as the proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current thresholds. There is also a suggested corporate tax rate of 28%, up from 21%, though analysts expressed doubt about Congress agreeing to this level, suggesting a more realistic possibility of 25%. Biden’s proposal for a Social Security and Medicare tax for higher earners is also set to rise from 3.8% to 5%.
If Harris secures the nomination, speculation surrounds potential vice presidential picks, including Governors Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Senator Mark Kelly of Arizona.