Kamala Harris’ economic policies are expected to remain largely unchanged if she becomes the Democratic presidential nominee, according to Goldman Sachs analysts. President Biden announced on Sunday that he will not seek re-election, following significant pressure due to his debate performance against Trump.
Biden endorsed Harris, who confirmed her candidacy and received support from several prominent figures, including California Governor Gavin Newsom and Pennsylvania Governor Josh Shapiro. However, the anticipated shift in leadership is unlikely to result in dramatic changes to policy.
Goldman Sachs assessments suggest that the Democratic fiscal and trade policy agenda will likely stay consistent, even if Harris assumes the nomination. Analysts predict a slight increase in the chances of a Democratic victory in the presidential election, projecting it at just under 40%.
As the expiration of personal income tax cuts looms at the end of 2025, the next administration will have to make critical decisions regarding tax extensions and potential new taxes.
Specific forecasts for fiscal policy under a possible Biden victory include:
– A tax rate of 39.6% for individuals earning $400,000 or more, up from the current rates of 35% and 37%.
– A proposed increase in the corporate tax rate to 28%, up from 21%. Analysts remain doubtful that Congress will agree to this, suggesting a more likely outcome around 25%.
– An increase in the Social Security and Medicare tax rate for incomes exceeding $400,000, proposed at 5%, up from the existing 3.8%.
Should Harris become the nominee, speculation points to potential vice presidential candidates including Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly from Arizona.