Kamala Harris’ economic policies are expected to remain largely unchanged if she secures the Democratic presidential nomination, according to Goldman Sachs.
In the wake of President Biden’s announcement that he will not seek re-election, following criticism of his debate performance against former President Donald Trump, Harris has confirmed her candidacy. Biden has endorsed her, and she has gained support from prominent figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman Sachs analysts suggest that the transition from Biden to Harris will not significantly alter the Democratic party’s fiscal and trade policies.
Goldman noted in a report that the chances of Democrats winning the White House have improved by a few points but still remain just under 40%. They emphasized that taxes will be a central fiscal issue in the upcoming year, particularly as the provisions of the Tax Cut and Jobs Act are set to expire by the end of 2025. The forthcoming election will determine the future of the tax cuts as well as potential new tax regulations.
The firm outlined several projections for fiscal policy should Biden win, including:
– A proposed tax rate of 39.6% for individuals earning over $400,000, an increase from the current 35%/37%.
– An envisioned corporate tax rate of 28%, up from the current 21%, although Goldman expressed skepticism about congressional approval, predicting a more likely rate of 25%. In contrast, Trump has pledged to reduce the corporate tax rate to 20%.
– A suggested tax rate of 5% for Social Security and Medicare on incomes exceeding $400,000, up from 3.8%.
In the event that Harris becomes the nominee, speculation suggests that potential vice presidential candidates could include Pennsylvania’s Governor Shapiro, North Carolina’s Roy Cooper, Kentucky’s Andy Beshear, or Arizona Senator Mark Kelly.