Kamala Harris’ economic policies are unlikely to differ significantly if she becomes the Democratic presidential nominee, according to Goldman Sachs.
Following President Biden’s announcement that he will not seek another term, which came after a challenging debate performance against Donald Trump, he endorsed Vice President Harris. She has confirmed her candidacy and has garnered several endorsements from high-profile figures, including California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. However, Goldman analysts note that there will not be a substantial shift in policy.
In a note released Sunday, Goldman Sachs’ chief economist Jan Hatzius stated that they do not expect any meaningful changes to the Democrats’ fiscal and trade policy agenda should Harris be nominated. Although Biden’s withdrawal raised the likelihood of a Democratic victory slightly, the chances remain just under 40%, according to their estimates.
The firm’s previous analysis highlighted that taxes will be a key fiscal focus in the coming year due to the impending expiration of certain provisions from the Tax Cut and Jobs Act at the end of 2025. This will set the stage for whoever wins the election to decide on the future of tax cuts and whether to introduce new tax policies.
Goldman Sachs provided several forecasts regarding fiscal policy if Biden wins:
– 39.6%: The proposed tax rate on individuals earning over $400,000, an increase from the current 35%/37%.
– 28%: Biden’s recommended corporate tax rate, up from the current 21%. Goldman expressed skepticism that Congress would agree on this figure, suggesting that a 25% rate is more likely. In contrast, Trump has pledged to reduce the corporate tax rate to 20%.
– 5%: The proposed tax rate on Social Security and Medicare contributions for incomes above $400,000, an increase from 3.8%.
If Harris becomes the nominee, prediction markets indicate that the most likely candidates for the vice presidential spot include Pennsylvania Governor Josh Shapiro, North Carolina Governor Roy Cooper, Kentucky Governor Andy Beshear, or Arizona Senator Mark Kelly.