Kamala Harris’ economic plans are unlikely to differ significantly if she becomes the Democratic presidential nominee, according to analysts at Goldman Sachs.
Following President Biden’s announcement that he would not seek re-election after facing increasing pressure for his performance in a recent debate against Donald Trump, he endorsed Vice President Harris, who expressed her intent to continue her candidacy. She has since garnered support from notable figures like California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs predicts a continuation of existing policies rather than a major shift.
Goldman Sachs analysts, led by chief economist Jan Hatzius, noted in a report that they do not foresee any substantial changes to the Democratic fiscal and trade policy agenda even if Harris becomes the nominee. They believe that the prospect of Harris replacing Biden has only marginally improved the Democrats’ chances of winning the White House, which they estimate remains just under 40%.
Research from Goldman also highlighted that taxes are expected to become a prominent focus next year due to the impending expiration of personal income tax provisions from the Tax Cut and Jobs Act at the end of 2025. The outcome of the election will determine decisions on tax extensions or new taxes.
In terms of fiscal policy forecasts under a potential Biden victory, Goldman has outlined the following numerical projections:
– 39.6%: This is the tax rate the Democrats are considering for individuals earning $400,000 or more, an increase from the current rates of 35% and 37%.
– 28%: The proposed corporate tax rate under Biden, rising from the current 21%. Goldman expressed skepticism that Congress would agree to this rate, suggesting a more feasible outcome could be around 25%. In contrast, Trump has promised to reduce the corporate rate to 20%.
– 5%: The proposed increase in the tax rate for Social Security and Medicare on incomes exceeding $400,000, up from the current 3.8%.
Should Harris secure the nomination, there is speculation in prediction markets regarding potential vice-presidential candidates, including Pennsylvania Governor Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Senator Mark Kelly from Arizona.