Harris’ Economic Future: What’s Next for Democrats?

Goldman Sachs has assessed that Kamala Harris’ economic plans are unlikely to differ significantly if she becomes the Democratic presidential nominee. This comes after President Biden’s announcement on Sunday to exit the race for the Democratic nomination, a decision influenced by intense calls for his departure post a challenging debate against former President Donald Trump.

Following Biden’s statement, he endorsed Vice President Harris, who expressed her intent to continue her candidacy, garnering high-profile support from figures like California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite the leadership shift, Goldman analysts, led by chief economist Jan Hatzius, predict little change in policy direction.

Goldman estimates that the odds of Democrats retaining the White House have increased slightly, although still below 40%. Their analysis also noted that tax policy will be a primary focus in the upcoming year, especially with the impending expiration of certain provisions from the Tax Cut and Jobs Act by the end of 2025. The new administration will have to make decisions regarding the extension of these tax cuts and potential new tax initiatives.

The firm provided several forecasts concerning fiscal policy if Biden secures a second term. They indicated a proposed tax rate of 39.6% for individuals earning $400,000 or more, an increase from the current rates. They also suggested a corporate tax rate proposal of 28%, which they believe Congress might negotiate down to 25%. Additionally, there is a proposed increase in the Social Security and Medicare tax rate on incomes exceeding $400,000 from 3.8% to 5%.

Should Harris be nominated, speculation around vice presidential candidates includes governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, and Arizona Senator Mark Kelly.

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