Goldman Sachs has suggested that Kamala Harris’ economic policies are unlikely to differ significantly from those of President Joe Biden if she secures the Democratic presidential nomination.
After facing mounting pressure to withdraw from the race following a poor debate performance against Donald Trump, Biden announced on Sunday that he would not pursue the Democratic nomination. He subsequently endorsed Vice President Harris, who has expressed her commitment to continue her candidacy. Harris has garnered notable endorsements from California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman anticipates that there will be minimal shifts in policy despite this change in leadership.
Goldman analysts, led by chief economist Jan Hatzius, conveyed in a statement that they do not expect a significant shift in the Democrats’ fiscal and trade policy agenda should Harris become the nominee. According to their report, the transition from Biden to Harris has only slightly improved the Democrats’ chances of winning the presidency, now estimated to be just below 40%.
The firm previously noted that taxes will be a critical focus in the next election cycle, particularly with the impending expiration of the personal income tax provisions from the Tax Cut and Jobs Act at the end of 2025. The future president will determine the likelihood of extending these cuts and the potential introduction of new taxes.
Goldman’s fiscal policy predictions for a Biden victory include a proposed tax rate of 39.6% on individuals earning $400,000 or more, an increase from the current rates of 35% and 37%. They also project a proposed corporate tax rate of 28%, up from the 21% rate, although they are skeptical about Congress approving this figure, predicting a more likely outcome of 25%. Additionally, Biden has proposed raising the Social Security and Medicare tax rate on incomes exceeding $400,000 to 5%, up from the existing 3.8%.
Should Harris secure the nomination, prediction markets suggest that potential candidates for the vice presidential slot include Governors Josh Shapiro of Pennsylvania, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Arizona Senator Mark Kelly.