Goldman Sachs has indicated that Kamala Harris’ economic strategies are unlikely to differ significantly if she becomes the Democratic presidential nominee.
With President Biden announcing his withdrawal from the race following mounting pressure after a challenging debate with Donald Trump, he endorsed Harris, who expressed her intention to continue her candidacy. Notable endorsements followed from figures such as California Governor Gavin Newsom, Pennsylvania Governor Josh Shapiro, and New Jersey Governor Phil Murphy. Despite this transition, Goldman analysts predict minimal changes in policy.
Analysts at Goldman Sachs, led by chief economist Jan Hatzius, stated that they do not expect a significant shift in the fiscal and trade policy agenda if Harris secures the nomination. Following Biden’s endorsement of Harris, the likelihood of Democratic success in the upcoming election improved slightly, still remaining below 40%.
Research from Goldman previously noted that tax issues will come to the forefront next year, particularly as the personal income tax provisions from the Tax Cuts and Jobs Act are set to expire at the end of 2025. The outcome of the election will ultimately determine the fate of these tax cuts and any potential new tax policies.
Goldman Sachs provided forecasts regarding fiscal policy if Biden were to win:
39.6%: Anticipated tax rate for high earners making $400,000 or more, an increase from the current rates.
28%: Proposed corporate tax rate, an increase from the current 21%, although Goldman expresses doubt that Congress would approve this, suggesting a 25% rate is more likely. In contrast, Trump has pledged to reduce the rate to 20%.
5%: Proposed tax rate increase for Social Security and Medicare on incomes over $400,000, up from 3.8%.
Should Harris be nominated, prediction markets suggest that potential candidates for the vice presidential slot could include Governors Shapiro, Roy Cooper of North Carolina, Andy Beshear of Kentucky, or Senator Mark Kelly of Arizona.