Goldman Sachs suggests that Kamala Harris’ economic policies will remain largely consistent if she secures the Democratic presidential nomination. This comes in light of President Biden’s announcement on Sunday that he is stepping aside for the nomination, following criticism of his recent debate performance against Donald Trump.
In his statement, Biden endorsed Vice President Harris, who has since expressed her commitment to run and has garnered support from prominent figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this political transition, Goldman analysts believe there will be minimal changes to the Democrats’ fiscal and trade policy agenda under Harris.
Goldman’s analysis indicates that the likelihood of Democrats winning the White House has slightly increased but remains just below 40%. The firm has pointed out that taxation will be a critical issue in the upcoming year, particularly with certain provisions of the Tax Cut and Jobs Act set to expire by the end of 2025, leaving the next administration to determine potential extensions or new tax policies.
Specific tax forecasts under a hypothetical Biden administration propose a 39.6% tax rate on individuals earning $400,000 or more, an increase from current rates, and a corporate tax rate raised to 28%, although Goldman doubts Congress would approve this and suggests a 25% rate might be more realistic. Additionally, Biden has proposed a Social Security and Medicare tax rate of 5% on incomes exceeding $400,000.
If Harris becomes the nominee, potential candidates for the vice presidential slot include Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.